Total technology crowdfunding is expected to grow to $8.2 billion in 2020 from $1.1 billion in 2015, estimates Juniper.
The growth of technology crowdfunding investments will accelerate in coming years, boosted by increasing equity investments, research firm Juniper said on Monday.
The trend happens at the time when traditional investment market is seeing a slowdown in traditional investments from Venture Capitalists and angel investors.
Juniper said it believes that other nations will follow countries like Britain by legislating to allow less sophisticated investors to engage in equity crowdfunding. “The US, in particular, holds considerable promise, with the positive SEC (US Securities and Exchange Commission) ruling on the JOBS Act, Title III passed in October 2015. The result of which will be a surge in equity funding from 2016 onwards; as funding portals seek registration as early as January 2016,” Juniper said.
Reward-based crowdfunding, popularised by Kickstarter and Indiegogo, has has suffered recently following a number of high-profile failures, and hence the platforms are beginning to look at more hybrid crowdfunding models, whereby users have the option of investment in the company or project itself via equity or debt, rather than receiving a one-off reward gift.
“The hybrid concept has been demonstrated recently, with video games crowdfunding platform ‘Fig’ hosting projects to be backed through a combination of the rewards and equity models. Equity is attractive for consumers, who feel they may be investing in the next ‘Oculus Rift’ or ‘Pebble Time’, hence in line to make a significant profit,” analyst Lauren Foye said in a statement.
Juniper said it expects total technology crowdfunding to rise to $8.2 billion in 2020 from $1.1 billion in 2015.