Crowdfunding Monitor 2021

- Crowdwisdom: crowdwisdom (swarm intelligence) leverages the intelligence of a commu-

nity. The crowd is asked to activate and reflect on their knowledge.

- Crowdcreation: the objective of crowdcreation is to leverage the creative potential of a

crowd. The aggregated ideas of the crowd are deployed in the form of texts, audio files,

illustrations and so forth.

- Crowdvoting: crowdvoting leverages the opinions and judgement of the crowd. to assess

ideas or content. The opinions generated by this process then serve as the basis for decisions

by the crowd. Crowdvoting can consequently be used as a forecasting tool.

- Crowdfunding: in crowdfunding, use of the internet and the crowd are also key elements.

However, in contrast to the aforementioned segments, the focus is not on the knowledge or

creative potential of the crowd, but rather on raising funds for projects. The fundraising

phase is called a campaign.

1 For more on the subject, see e.g. Kaltenbeck, J. (2011). Crowdfunding und Social Payments. Berlin: epubli (pub.).

2 Howe, J. (2006). The Rise of Crowdsourcing. Wired magazine. Issue 14.06.

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2.1 Definition of crowdfunding: consideration as a decision criterion

The term crowdfunding defined as the raising online of funds for projects can be divided further

into subsegments. The main criterion for distinguishing between the different types of crowdfunding

is the type of consideration received. The consideration can be of a monetary nature, with the pro-

viders of the capital receiving a stake in the company (crowdinvesting) or interest (crowdlending) on

the capital that was provided. It follows that invoice trading is often seen as a form of crowdfunding.

Invoice trading involves the selling of unsettled invoices. Depending on the platforms business

model, invoice trading is either traditional crowdfunding (several investors funding the invoices) or a

model akin to crowdfunding (only one counterparty) the deciding factor being the number of inves-

tors. Due to their proximity to the finance sector, crowdlending crowdinvesting and invoice trading

are covered by the term FinTech (financial technology).

The consideration for the support provided by a crowdfunding campaign can also be non-monetary

in nature. The model defined in this study as reward-based crowdfunding (called crowdsupporting

in Switzerland), falls within this segment. In the case of reward-based crowdfunding, consideration

may take the form of products or services. Finally, money can also be given without any direct, meas-

urable consideration (crowddonating), in which case social or altruistic motives take centre stage.

However, this is also often the case for reward-based crowdfunding, where there is a strong focus on

supporting a specific idea, as it is very difficult to objectively measure the consideration in the form

of goods or services and, depending on the campaign, the consideration might represent only a small

portion of the investment.

The five crowdfunding segments and associated considerations are summarised in Figure 1:

Crowdfunding

Reward-based

crowdfunding

Donation-based

crowdfunding

Crowdinvesting

Business / Startup

(P2B/B2B)

Real Estate

Invoice Trading

Crowdlending

Business

(P2B/B2B)

Consumer

(P2P, B2P)

Real Estate

(B2P/P2P/B2B/P2B)

Commercial, product

presale (P2B)

Noncommercial

(P2P/B2P)

E.g. products /

services

No direct reward

Profit participation

Interest

Discount

B=Business, P=Private. First letter denotes

investor/sponsor; second letter capital seeker

FinTech

Figure 1: Types of crowdfunding and consideration for each crowdfunding segment

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Reward-based crowdfunding

The reward-based crowdfunding segment often includes creative, cultural or commercial projects as

well as sport projects. With this type of funding, those providing funds usually receive one-off consid-

eration in the form of products, works of art or services. There is no limit to the creativity of those

seeking funding (e.g. invitations to events, special editions or pre-release access to a product). Reward-

based crowdfunding can have a commercial or a non-commercial purpose: companies with a com-

mercial background, in particular, can use reward-based crowdfunding for the pre-financing of prod-

ucts.

Crowddonating

The contributions made in crowddonating are simple donations that are not usually associated with

any consideration. Examples include social, charitable and cultural projects. Crowddonating can also

be used to raise funds for political campaigns.

The data gathered by the report does not always allow a distinction to be made between crowd-

donating and reward-based crowdfunding, as some platforms allow those providing funds to forego

consideration. As a result, the report has viewed these two segments as the same thing, particularly

in terms of the trends in volumes traded.

Crowdinvesting

Instead of funding a project, the purpose of crowdinvesting is to acquire a stake in a business or

property via equity or mixed forms of equity and borrowed (mezzanine) capital.

In the business crowdinvesting subsegment, this form of financing is particularly suitable for busi-

nesses in the early stages of development, e.g. start-ups. Depending on the platform, crowdinvesting

also provides small investors with the opportunity to support start-ups in their growth phase. In return,

these investors typically receive shares in the business and/or a share in the profit it generates. It

should be noted that voting power is limited for many types of investments in this area in order to

ensure that the owners of the business are free to act as they see fit.

Alongside business crowdinvesting, real estate crowdinvesting is also part of the crowdinvesting seg-

ment. With real estate crowdinvesting, investors (often entered in the Swiss Land Register) become

co-owners of a property. Rather than individual freehold apartments, co-ownership involves purchas-

ing a percentage of an existing tenanted property. As a result, the investors take a stake in the rental

income and in any rise in value of the property itself as and when it is sold.

Crowdlending

Crowdlending refers to the financing of businesses or private individuals by means of loans (borrowed

capital). Lenders receive interest payments in return for their loan; the amount of interest payable

depends typically on the risk presented by the borrower. Alongside private loans and SME loans, pri-

vate individuals are able to acquire mortgages without a bank as intermediary. In this Monitor, loans

for private individuals are designated consumer crowdlending, while business crowdlending covers

loans for businesses. The report uses the term real estate crowdlending for loans in the form of mort-

gages.

Crowdlending is also known as peer-to-peer (P2P) or marketplace lending. The term P2P lending has

established itself in the UK in particular, while the term marketplace lending tends to be used in the

USA. Marketplace lending can be defined more accurately as a digital credit marketplace. It also

encompasses B2B (business-to-business) business models, such as where institutional investors pro-

vide finance for companies or corporations under public law. By contrast, this study focuses on

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crowdlending, i.e. borrowed capital that can be financed both by institutional and private investors.

B2B business models are only briefly discussed in Section 3.5.

Invoice trading

In this form of crowdfunding, investors purchase unsettled business invoices at a discount. Invoice

trading thus enables SMEs to obtain short-term liquidity. From the investors standpoint, the differ-

ence between the amount paid for the invoice and the amount of the invoice itself is what constitutes

the income received. The direct linking of those seeking funds and those seeking to invest gives rise

to a new investment class. At the time of writing, there is no longer a platform in Switzerland that is

open to the public and non-professional investors with small amounts to invest (unlike in the B2B

segment, where there are several such opportunities). This is why the statistics for 2020 show no

separate figures for this area.

2.2 Project initiators motives for launching campaigns

Crowdfunding campaigns have both financial and non-financial advantages for project initiators. On

the one hand, the main motivation is typically the need to fund a project; on the other hand, raising

funds through crowdfunding can also offer non-financial benefits. Crowdfunding enables businesses

or individual project initiators to enter into direct dialogue with (potential) customers and receive

immediate responses from them. As a result, crowdfunding campaigns are well suited to customer

acquisition and retention. A good project can also enhance the image of a supplier or draw attention

to an innovative project. Another advantage of crowdfunding campaigns is that project initiators can

use successful campaigns to demonstrate that there is a market for their products or services a kind

of market test. And finally, crowdfunding can also find capital for good ideas which typically do not

fit the model required by traditional lenders. As a result, swarm intelligence can lead to recognition

and support for trends and good ideas.

2.3 Distinction: initial coin offerings as crowdfunding?

Initial coin offerings (ICOs) could be regarded as a form of swarm financing for projects that come

under the scope of distributed ledger technology (DLT). Many ICO characteristics are similar to those

in this reports working definition of crowdfunding. Typically, a large number of people provide fund-

ing for an undertaking or project. Intermediation between project initiators and backers takes place

online. Some ICOs offer the possibility of consideration for backers. In this respect, the categorisation

in Figure 1 also applies to ICOs. That said, there are also differences. The first difference where ICOs

are concerned is that the funding provided is often expressed in the form of a cryptocurrency and/or

an equivalent in DLT-based values. It follows that ICOs are typically used to fund highly technology-

heavy (blockchain-related) projects, whereas crowdfunding campaigns are far more diverse. A second

difference is that while crowdfunding projects tend to be linked to particular online platforms, ICOs

receive funding directly from backers without intermediation by a platform.

In practice, there are few DLT technology applications in Switzerland within traditional crowdfunding.

One of the few exceptions is swisspeers, where loans can be transacted and managed on the

Ethereum block chain. The Monitor presents only those campaigns conducted under traditional

crowdfunding scenarios.

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3 Crowdfunding in Switzerland

Focused on crowdlending, the first crowdfunding platform to be launched in Switzerland was Cashare;

the year was 2008. Crowddonating platform GivenGain launched in 2009, followed by crowdinvest-

ing platform investiere (Verve Ventures3) in 2010 and the two reward-based crowdfunding platforms

Crowdify (formerly 100days) and wemakeit in 2012. Numerous platforms entered the Swiss market

between 2014 and 2017.

38 crowdfunding platforms were maintaining a domiciled office presence in Switzerland as of the

end of April 2021. Of these 38 platforms, 28 reported successful funding campaigns in 2020. Two

foreign platforms also reported successful campaigns by project initiators from Switzerland: we have

taken these into account in the Monitor.4 The 28 Swiss platforms with successfully funded campaigns

are listed below.5 The figures relating to the Swiss market are based on these 28 platforms and two

international platforms.

Crowd-

investing

Crowd-

lending

Reward-based

crowdfunding

Crowddonating

Business / start-up

investiere (Verve Ventures)

Real estate

Beedoo, Crowdhouse, Foxstone, Imvesters

All segments

Cashare, CreditGate24

Business and consumer

Crowd4Cash, Lend

Business only

Acredius, Creditworld, Funders6, Neocredit, swisspeers

Consumer only

Lendora, Splendit

Real estate only

Raizers, Swisslending

Crowdify, Funders, GivenGain, I believe in you, I care for you, Lokalhelden.ch,

Progettiamo, ProjektStarter, SIG Impact, Wemakeit, Yes We Farm

Table 1: Platforms with active campaigns in Switzerland in 2020 (as of April 2021).

Figure 2 shows the entries and exits of platforms in the Swiss market since 2008. Unlike Table 1, this

illustration shows all the platforms that have ever been online. It means that Fig. 2 includes platforms

that have not yet witnessed any campaign activity. Market developments at a platform level can thus

far be termed selective consolidation. Larger players (relatively speaking) have not yet left the mar-

ket. Players that have are mainly small with only very small volumes.

3 investiere now operates under the name Verve Ventures.

4 We have not included foreign platforms witnessing only occasional and/or small Swiss projects. The two foreign plat-

forms included are Kickstarter and KissKissBankBank.

5 Some platforms did not respond to our survey or explicitly did not wish to participate. As a consequence, there may

well have been other platforms conducting successful campaigns. The table shows the platforms on which the studys

figures are based.

6 Funders operates in the crowdlending as well as the reward-based crowdfunding segments, which is why it appears

twice in the above table.

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The number of crowdfunding platforms in Switzerland was slightly down in 2020, something that

happened in 2018, too. The platform immoyou exited the market in 2020. There were no new en-

trants in 2020. Figure 3 on the next page shows the number of entries and exits of platforms in the

Swiss market since 2008: 21 platforms have left the market in the last five years.

Figure 2: Entries and exits of crowdfunding platforms in the Swiss market

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Entry

Exit

Figure 3: Number of entries and exits of crowdfunding platforms in the Swiss market 2008 to

2020

3.1 Market growth in Switzerland

Figure 4 shows the growth and overall volume across all crowdfunding segments in Switzerland since

2008. The volume of successfully funded campaigns7 has grown steadily over the years. The CHF 100

million barrier was breached in 2016. In 2018 the volume reached another milestone of more than

half a billion francs (CHF 516.6 million). Finally, 2020 saw a volume of CHF 606.6 million transacted

via crowdfunding platforms.

Although growth rates have always generally been positive, they have steadily flattened in recent

years: the market grew by 38.0 percent from 2017 to 2018, but 15.6 percent from 2018 to 2019.

2020 still managed to post a small increase of 1.6 percent compared to 2019 despite the Covid-19

pandemic.

Since the launch of the first crowdfunding platform in 2008, crowdfunding has been used to raise

CHF 2,288 million in funds. Just over a quarter of this amount was achieved in 2020 alone.

The total volume of CHF 606.6 million for 2020 was spread across 17,359 campaigns. However,

13,092 of these campaigns were handled by temporary platforms in the reward-based crowdfunding

/ crowddonating segment that emerged during the Covid 19 crisis.8 2019 witnessed the successful

funding of 4,648 campaigns.

The largest of all the crowdfunding segments in terms of volume share continued to be crowdlending

with a volume of CHF 448.0 million. Its growth relative to 2019 stood at 7.1 percent. The second-

highest volume of CHF 114.0 million was generated by the crowdinvesting segment. Its volume fell

7 A campaign is considered successfully funded when the funds contributed by lenders are released to the project

initiators. Campaigns with a fixed target amount are successful only if this amount has been reached (all-or-nothing

model). Our report also deems the campaign successful if no fixed target amount is defined but funds are still raised. As

a result, the amounts listed reveal only the amount of money that changed hands. The report does not consider whether

the funded campaign can actually be implemented as a successful project.

8 The term campaign serves as a catch-all term for the funding of projects, credits, businesses and properties.

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by around 26 percent compared to 2019. In contrast to 2019, reward-based crowdfunding / crowd-

donating volumes increased again in 2020 to hit CHF 44.6 million (+81.6%). Moreover, the number

of successfully financed campaigns in this segment shot up by 747 percent to 14,984. If the number

of campaigns is considered without the temporary platforms, the growth was 7.0 percent to 1,892

campaigns.

The following sections take a closer look at the trends in the individual segments reward-based crowd-

funding / crowddonating, crowdlending, and crowdinvesting.

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Reward- and donation-based crowdfunding

Crowdlending

Crowdinvesting

Invoice Trading

Figure 4: Successfully funded campaigns by funding volume 2008-2020

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3.2 Reward-based crowdfunding / crowddonating

2020 saw 14,984 campaigns funded in the reward-based crowdfunding / crowddonating segment,

generating a volume of CHF 44.6 million. CHF 12.6 million of that came from 13,092 projects run by

temporary platforms. In terms of the number of campaigns, growth was 747 percent above 2019. If

one only considers the traditional platforms, the growth was 7.0 percent compared to 2019. The vol-

ume compared to 2019 also rose a significant 81.6 percent. Compared to the previous all-time record

year of 2017, the increase was an equally impressive 53.3 percent. Due to the significant increase in

the number of campaigns, the average volume raised by the campaigns dropped from CHF 13,890

to CHF 2,980 compared to 2019. Excluding the campaigns and volume of the temporary platforms,

the average financed campaign volume comes to CHF 16,980.

2020s sharp increase in the number of campaigns and the volume is mainly attributable to the

Covid-19 crisis. The pandemic had a strong impact on the platforms: conventional campaigns de-

clined sharply, especially in spring 2020, while the need for support for new (Covid-19 related) cam-

paigns sky-rocketed.

Most pre-existing platforms reacted nimbly to the Covid-19 crisis and launched a range of solidarity

campaigns some by, for example, introducing separate channels for hosting Covid-19-related pro-

jects. Some platforms also waived or lowered their fees, while others set up special (and not project-

linked) solidarity pots to gather funds for people impacted by Covid-19.

Examples of such initiatives were wemakeits we make solidarity and we make tourism channels,

or the colibri donation button it introduced in partnership with pro helvetia. The #z mef ralli fund-

raising campaign by the platform I care for you, raised funds totalling CHF 1.7 million, which were

distributed to individuals and families. The #LocalSupport campaign by lokalhelden.ch offered SMEs

vouchers with a partial monetary equivalent or future benefit, e.g. a dinner. And Projektstarters Solo-

tharity campaign enabled Solothurns businesses and clubs/associations to sell their vouchers, ex-

empting them from the usual commissions.

Some 40 to 50 new reward-based crowdfunding / crowddonating platforms emerged during the first

quarter of 2020 alongside the pre-existing platforms. Most of these were used to sell vouchers that

benefited local businesses. The biggest initiatives and platforms included #ensemble19 and soutien

aux commer ants, in French-speaking Switzerland, and B rn Hiuft, Arosa Tourismus, Help Gastro and

DireQt from QoQa elsewhere in the country. These platforms alone raised CHF 12.6 million in 2020.9

Figure 5 shows the reward-based crowdfunding / crowddonating volumes from 2012 to 2020. The

volumes have also been subdivided into individual categories for 2015 to 2020. Details of this subdi-

vision of successful campaigns into the various categories may be seen in Figure 6 and Table 2.

There was a very high growth in this reports Society, social projects category, to which the funds

raised by temporary (Covid-19) platforms have been assigned: the volume of CHF 19.3 million was

raised by 13,374 projects. The pandemic thus triggered a wave of solidarity in 2020, which is also

reflected in the 308.9 percent increase in volume and 5,639.9 percent increase in the number of cam-

paigns. Excluding the CHF 12.6 million raised by temporary platforms and the 13,092 related projects,

a volume of CHF 6.7 million would have been raised by 282 campaigns, which corresponds to a growth

of 41.8 percent in volume and 21.0 percent in the number of campaigns. The volumes thus also in-

creased significantly for the pre-existing platforms in the Society, social projects category.

On the other hand, other categories (which were large in previous years) such as Sport, health and

Music, concerts, festivals saw declines: Sport, health, for instance, raised CHF 4.2 million through

9 The volumes raised by these platforms have been assigned to this reports Society, social projects category.

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379 projects, a decrease of CHF 1.3 million (-23.6%) and 214 projects (-36.1%) compared to 2019:

platforms reported a dramatic slump in new projects, especially during the first Covid-19 wave. The

decline suffered by the Music, concerts, festivals category, though steep, was not quite as severe:

whereas the figure for 2019 was CHF 2.6 million raised for 282 projects, 2020 saw only 194 projects

(-31.2%) financed with a volume of CHF 2.1 million (-19.2%).

The Technology, business and start-ups category witnessed a mildly positive trend that saw the

same number of campaigns as in 2019 raise CHF 2.4 million (+ CHF 0.8 million). The volume in this

segment is largely driven by major campaigns with an international orientation, which are often

transacted via Kickstarter: some CHF 2.3 million was raised via this platform. The strong growth in the

Technology, business, start-ups category of previous years, the decline in 2019 and the renewed

increase in 2020 are primarily due to a small number of high-volume watch-related projects on

Kickstarter.

In 2016, watch-related campaigns raised CHF 2.1 million. This figure was CHF 4.6 million in 2017,

CHF 3.9 million in 2018, CHF 1.4 million in 2019 and CHF 1.5 million in 2020. Few in number but

substantial in terms of value, these projects lead to very high average campaign amounts (see Table

2). The largest Swiss-based campaign (for one watch) on Kickstarter in 2020 raised CHF 495,557, in

contrast to 2019, however, when campaigns on Swiss platforms exceeded this value. The Lokalhelden

platform, for instance, saw CHF 564,079 raised for a project called #EusesAlbani. Meanwhile

Crowdify hosted a project named System Change. Jetzt!, which raised CHF 537,159.

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Other categories

Sports, health

Society, social projects

Number of campagins

Technology, business , start-up

Music, concerts , festivals

Reward- and donation-based crowdfunding

Figure 5: Reward-based crowdfunding / crowddonating volumes and number of campaigns 2012-

2020

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Software

Politics

Design

Dance, theatre

Architecture, interior design

Film, video

Photography

Miscellaneous

Games

Tourism, hospitality

Fashion

Media, books, literature

Agriculture

Education...