OFF3R has launched an independent Index designed to outline performance of equity crowdfunding and peer to peer lending platforms. OFF3R is a platform aggregator allowing investors a single site or App in which to select and invest. The index is said to analyze major UK equity crowdfunding platforms including Seedrs, Crowdcube, SyndicateRoom, AngelsDen, Envestors and The House Crowd. The P2P lending platforms incorporated are; Zopa, Landbay, RateSetter, ArchOver, MarketInvoice, Lending Works, Funding Circle and Thin Cats. According to the OFF3R Index, equity crowdfunding has raised a combined total of £216.25 million and P2P facilitated a combined lending of £2.6 billion.
“Our Index is part of our mission to educate and empower investors to make informed decisions and get better returns,” said Lex Deak, CEO and co-founder at OFF3R. “We’re excited to be launching this report at such a critical time. Traditional investors have had a tough year: interest rates hit record lows, inflation rates are set to increase and the economy is suffering from Brexit uncertainty. These events alongside low returns are encouraging investors to consider alternative investment options.”
Deak said that as the market matures investors will want the current cap on equity crowdfunding to push beyond the £4 million limit today. Currently, companies seeking a raise of more than this amount must file a complete prospectus. This is a movement in the UK and in Continental Europe to move this amount higher.
Deak also said he expects improved standardization making it easier for investors to compare.
Regarding P2P lending, Deak said it remained a very popular asset class for investors with September being the strongest month on record with £234 million being originated on the lending platforms. “The Government has bought into its potential and the market is increasingly robust.”
OFF3R’s Key findings include:
- An average amount raised per month of £18 million across the seven platforms
- 80,000 investments were made, with just fewer than 400 funded deals
- October 2015 to December 2015 was characterized by a high growth trend, due to investor confidence in the asset class, a selection of large fund raisers and the state of the broader macro-economic environment
- December 2015 was the best performing month of funding with £26 million raised
- January 2016 to September 2016, represented an approximate 25 per cent drop off in raised activity between these months and the previous year
- Two events during 2016 shows crowdfunding is an established player aligned with wider investment sentiment: the FTSE three-year low in January 2016 and the post-Brexit fallout
- An average amount lent per month of £197 million across the eight platforms
- April 2016 showed a seven per cent drop due to a number of factors, such as Lord Turner’s negative comments about the P2P market and Lending Club’s loan book discrepancies scandal
- Slight drop in total lending throughout June and July 2016
- August 2016 lending increased 20 per cent – the biggest month-on-month increase in their data
- September 2016 was the strongest performing month with nearly £234 million bring lent