Indiegogo has been at the forefront of the rewards based crowdfunding phenomena. While Kickstarter may be a bit better known, Indiegogo actually launched prior to its committed competitor. Over the years, Indiegogo has expanded its platform moving into new countries and offering new and innovative services. The platform has been quite proud (and it should be) of the number of the companies that used its crowdfunding vehicle and then went on to raise equity capital as the companies gained market traction.
But recently the news coming out of Indiegogo HQ has taken a bit of a shift. Indiegogo co-founder Slava Rubin relinquished his position as CEO to focus full-time on innovation and growth. Just last week it was revealed that Indiegogo had let go a number of employees as it entered a phase of restructuring. There have been rumblings that growth at Indiegogo has been slowing so we decided to ask Barry James, of the Crowdfunding Centre, what his data showed.
According to James, the volume of projects has declined at Indiegogo when comparing 2015 to 2014. His numbers indicate:
- Total projects added in 2014 stood at 79,627 vs. 70,110 for 2015
- Projects ending fully funded in 2o15 declined to 13% from 14% in year prior
- Total projects ending fully funded declined from 10,328 in 2014 to just 8,552 in 2015
- Average number of projects added per day declined from 281 to 192
James, who recently published the 2016 State of the Crowdfunding Nation report observed, “the report shows that the market has expanded steadily, at 25% over the last year. During this time, Indiegogo’s trajectory has slowed significantly while Kickstarter has been only a little off the global pace”.
Kickstarter has successfully raised $1.91 billion since its launch. Indiegogo stands at about a billion.
So does this mean the board of directors thought it was time for a strategic shift to take Indiegogo into a new direction? Has Indiegogo’s decision to allow campaigns with less rigorous vetting (in comparison to Kickstarter) hurt public perception of the crowdfunding platform? Is Indiegogo becoming a presale store? What about investment crowdfunding? Allowing investors to purchase equity, not just perks, was part of its original business plan. But meanwhile, as US crowdfunding platforms have started to gain traction under Reg A+, Indiegogo has held firm and not moved in.
The appointment of Dave Mandelbrot as CEO of Indiegogo is most definitely a harbinger of forthcoming change. It will be interesting to see what Mandelbrot decides with Title III equity crowdfunding which becomes actionable this coming May.
Update: A spokesperson for Indiegogo has reached out to refute any allegations of slowing growth. According to Indiegogo;
“This report is inaccurate, at least in terms of misrepresenting Indiegogo’s growth and success.”