Crowdfunding Volume Regains Strength in Switzerland

Crowdfunding Volume Regains Strength in Switzerland

by June 9, 2022

In 2021, crowdfunding volumes in Switzerland regained some strength after activity stalled in 2020 due to various effects of the COVID-19 pandemic. The year saw a volume of CHF 791.8 million transacted via crowdfunding platforms, a significant market growth of 30.5% compared to 2020, according to the annual Crowdfunding Monitor Switzerland report by the Institute of Financial Services Zug IFZ of the Lucerne School of Business.

Successfully funded crowdfunding campaigns in Switzerland by funding volume 2008-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Successfully funded crowdfunding campaigns in Switzerland by funding volume 2008-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Like previous years, crowdlending led most of the year’s crowdfunding activity, making up 76.7% of 2021’s total volume (CHF 607 million). The sum represents a 35.5% increase from 2020’s figure of CHF 448 million, the biggest annual jump across the four crowdfunding segments studied. The amount was raised through 3,055 crowdlending campaigns (versus 2,323 in 2020).

Of the CHF 607 million raised through crowdlending in 2021, CHF 418 million was accounted for by real estate, up 40.9% from 2020 (CHF 296.7 million). It’s followed by business crowdlending (CHF 110.4 million in 2021 versus CHF 95.9 million in 2020), and consumer lending (CHF 78.7 million in 2021 versus CHF 55.4 million in 2020).


Onespan
Crowdlending volumes in Switzerland 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Crowdlending volumes in Switzerland 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

After crowdlending, the crowdinvesting segment recorded the second-highest volume of 2021 at CHF 147.2 million (29.1%), up 29% from 2020 at CHF 114 million. The bulk of the volume in crowdinvesting again came from the real estate category at CHF 142.2 million. That’s more than double 2020’s figure of CHF 69 million.

According to the report, the strong growth observed in the real estate crowdinvesting segment has been driven by strong demand for home ownership and stimulated by the low mortgage interest rates, the working from home trend and the negative interest rates.

Crowdinvesting volumes in Switzerland 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Crowdinvesting volumes in Switzerland 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Finally, the third main crowdfunding segment studied, reward-based crowdfunding and crowddonating, generated a volume of CHF 37.6 million through 1,867 campaigns. It’s the only crowdfunding segment that recorded a decrease in 2021, dropping in volume of around 15.8% compared to 2020.

Reward-based crowdfunding : crowddonating volumes and number of campaigns 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Reward-based crowdfunding : crowddonating volumes and number of campaigns 2012-2021, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

2022 forecasts

Apart from looking at past years’ crowdfunding activities, the report also shares predictions on what’s to come this year onward.

In 2022, the Swiss crowdfunding market is expected to grow further, and could very well break the billion franc barrier for the first time, the report says. It anticipates a volume of between CHF 1-1.1 billion in 2022.

In the crowdinvesting segment, the momentum is set to continue in 2022, growing at a projected annual growth rate of between 30% and 40%. This would translate to an estimated total volume of CHF 780-850 million in 2022.

If this growth does in fact continue, the crowdlending market will likely reach a critical size within the next three to five years during which it will become of interest to a larger number of institutional investors, further fueling the sector.

In the crowdinvesting market, the report expects real estate crowdinvesting to grow at a growth rate of 40%-50% in 2022 to reach CHF 195-210 million. As for business crowdinvesting, more momentum is expected as well as new platforms enter the markets.

Switzerland’s crowdfunding platforms

As of the end of April 2022, 37 crowdfunding platforms were operating in Switzerland. Of these 37 platforms, 28 reported successful funding campaigns in 2021, in addition to three foreign platforms: Kickstarter, KissKissBankBank and Dagobertinvest.

Platforms with active campaigns in Switzerland in 2021 (as of April 2022), Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Platforms with active campaigns in Switzerland in 2021 (as of April 2022), Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

In 2021, three crowdfunding platforms withdrew from Switzerland, the report says: c-crowd and mybrick exited the Swiss market, while new platform there-for-you.com acquired the activities of I care for you. Another newcomer to the Swiss market is Conda, an Austrian crowdinvesting platform.

Since 2008, 61 crowdfunding platforms have been launched in Switzerland.

Entries and exits of crowdfunding platforms in the Swiss market, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

Entries and exits of crowdfunding platforms in the Swiss market, Source: Crowdfunding Monitor Switzerland 2022, Institute of Financial Services Zug IFZ of the Lucerne School of Business

 

Featured image credit: Edited from Freepik

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