SeedInvest, a top US-based investment crowdfunding platform, is reporting solid performance during a difficult period when much of the country has been shuttered due to the Coronavirus pandemic.
In a blog post, SeedInvest said the second quarter of 2020 will be its best ever.
According to the investment platform, investor sign-ups are booming. SeedInvest is on track to surpass 100,000 new investor signups during the first half of 2020 which exceeds ALL of 2018 and 2019 combined. That’s pretty impressive.
Investment volume and number of investments during the first half of the year will top the investment volume during all of 2019.
In April, SeedInvest experienced the highest investment volume they have ever experienced. Q2 is tracking at 3X the same quarter in 2019.
So why the gangbusters performance?
SeedInvest believes that COVID-19 may be helping its growth. With everyone locked up at home, people are doing most of their shopping and interacting online. This experience appears to be driving online investments as well. SeedInvest states:
“On the investor side, over the past couple months, people have been at their computers more, opening more emails, spending more time on the web and investing in more startups. On the entrepreneur side, traditional offline fundraising is effectively frozen (more on this below) so online fundraising is now one of the only games in town. As with Amazon, once entrepreneurs and investors experience a more efficient and less painful offline process, how many will go back?”
Online capital formation stands in stark contrast to venture capital which has pulled back and hit the risk-off button. SeedInvest notes that U.S. VC investment volume was down 46% in April compared to March, and down 43% year-over-year.
Platforms like SeedInvest are not beholden to a few institutions or wealthy individuals like VC funds. SeedInvest currently has 350,000+ registered investors and it appears they are ready to invest. We have heard similar chatter from other platforms.
There has been a good amount of discussion regarding digital transformation during the crisis. COVID-19 has become a major accelerant for this transformation with WFH companies, e-commerce and digital entertainment benefitting massively. Maybe, investment crowdfunding will be a long term beneficiary as well.