OFF3R Index

Equity Crowdfunding recovers during February

Aisling Browne
Written by Aisling Browne

The latest February data from the OFF3R Index has shown that equity crowdfunding recovers, whilst Peer-to-Peer lending (P2P) levels have remained steady.

This data is against a backdrop of economic resilience in the UK during February according to figures released by the The Bank of England (BoE). November’s budget forecasts were surpassed, as the UK economy grew at a faster rate than was previously predicted.[1]

Equity Crowdfunding Recovers

Although January’s OFF3R Index reported a strong month for P2P
lending, equity crowdfunding platforms suffered a slow month in funds raised. January has typically been a quiet month for equity crowdfunding given the post Christmas lull.

February’s OFF3R Index data, made up of 6 equity crowdfunding platforms, has shown a strong uptick funds raised since January. The figures have jumped from just under £9M in January to well over £16M in February. These figures were boosted by large rounds from Hibergene (raised via SyndicateRoom) and CauliRice (raised via Crowdcube).

Early data from March appears to suggest that this momentum will continue for the equity crowdfunding sector. There has been an increase in the number of larger rounds this month across many of the platforms. This is consistent with the data trends that we saw last year as investors increase investments in equity crowdfunding just before the end of the tax year (5th April 2017).

P2P Lending Levels Remain Steady

P2P Lending saw some of the best results to date in January. A positive start to the new year and February saw these high levels continue. Funding Circle announced it reached £2 Billion since launching, further legitimising the industry.[2] The total amount lent in February 2017 dropped to just over £287 Million. However, this was to be expected in light of the fact that it was a shorter month.

February also saw a small number of P2P platforms introduce their IFISA products. Lending Works experienced such high demand that their, £1M investment capped IFISA, was filled within 24 hours. [3] March has seen further IFISA products launched and it will be interesting to see whether this has had the effect of boosting the P2P lending data beyond the highs that we saw in January 2017.

However, we have still not seen a significant flow of money in to the products just yet despite these early IFISA being released. The big three of the P2P lending sector, Ratesetter, Zopa and Funding Circle, are still operating under interim permissions from the FCA and as such cannot issue their IFISA products. A noticeable increase in the amount of money lent via the platforms that form the OFF3R Index could happen if one or all of the big three are able to launch an IFISA product before the end of the tax year.


Data Sources

[1] https://www.theguardian.com/business/2017/feb/02/bank-of-england-uk-growth-forecast-economy-brexit

[2] https://www.fundingcircle.com/blog/2017/02/celebrating-2-billion-lent-uk-businesses/

[3] http://www.p2pfinancenews.co.uk/2017/02/17/lending-works-re-opens-ifisa-investor/

About the author

Aisling Browne

Aisling Browne

Aisling is the partnerships manager at OFF3R. Prior to OFF3R, she spent time working in New York at a property development business and subsequently for the British Red Cross in London. Aisling has a BA in Politics and International Relations.