One of the largest securities crowdfunding operators in the world, Seedrs, says investors today are just as interested in backing firms that align with their beliefs as seeking big returns.
Seedrs is based in London but operates across Europe. It is a subsidiary of US-based online investment operator Republic.
Pointing to an in-house commissioned survey, Seedrs says 57% of European individual investors want to support “industries you believe in as a very influential consideration when making an investment.”
Trailing the decision process was supporting brands you believe in at 48% and the “possibility of substantial returns at 47%.
Jeff Kelisky, Chief Executive Officer, Seedrs commented on the results:
“As Europe’s leading private investing platform, with the volume of activity we see, Seedrs are uniquely positioned to understand what’s affecting retail investor sentiment and decision-making. In this year’s survey it’s interesting, but possibly unsurprising with the popularity of ClimateTech, to see that industry affinity now rivals the possibility of substantial returns as the primary influence on investment decisions for our investors. As long-standing champions of EIS and SEIS, we are also pleased to see how fundamental a role those schemes now play in ensuring that the businesses that are shaping the world of tomorrow receive funding.”
Seedrs claims this is a big shift in sentiment because in 2022 54% of surveyed individuals said the possibility of substantial returns top the list.
Seedrs noted that in the UK, where there is very supportive tax relief for backing startups and smaller firms, this is a consideration for 70% of investors, with 35% describing it as a very influential factor.
On an industry basis, these are the areas individuals are keen to back:
- Clean Energy – 45%
- Climate Tech – 40% (up from 31% in 2022)
- Whereas, these are the sectors that there is less interest in year on year:Finance & Payments – 11% less
- Food & Beverage – 9% less
- Crypto – 9% less
Another aspect of the survey is that more than 50% of individuals are investing less than in previous years. This should come as no surprise as interest rates and inflation remain elevated. At the same time, it is a safe bet to park your money in an interest-bearing account until the storm clouds receed. This is similar to what were are seeing in Private Equity and Venture Capital reports.
Additionally, the report shares that in 2022, 14% of investors surveyed had over £500,000 and 35% had over £100,000 of investable assets. This has fallen to 12% and 30%, respectively in 2023.
Kirsty Grant, Managing Director & Chief Investment Officer at Seedrs says she is not surprised that so many investors consider ESG investments, adding that ClimateTech hhas jumped by 40% on Seedrs in 2023, compared to 2022.
“Fantastic campaigns this year include Green Lithium who are solving a crucial piece of the EV battery puzzle by building the UK’s first lithium refinery. They raised almost 3m from 2300+ investors.”
While ESG may be gaining traction in Europe, it has cooled a bit across the Atlantic in the US which views the concept more as a regulatory mandate as opposed to an investor option.
