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Industry Reports

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Cambridge Centre for Alternative Finance

2019

Shifting Paradigms:

The 4th European Alternative Finance Benchmarking Report

  • This year's study gathered data from 269 platforms with reported operations in 2017. These 269 platforms were responsible for 519 unique data entries across 45 countries in Europe. The study shows that the total European online alternative finance market (including the UK) grew by 36 per cent to reach €10.44 billion in 2017. The United Kingdom is still the largest individual alternative finance market, albeit with a declining market share from 73 per cent in 2016 to 68 per cent in 2017. Excluding the UK from overall volume, the European online alternative finance industry grew 63 per cent from €2.06 billion to €3.37 billion in 2017.

  • France (€661.37 million), Germany (€595.41 million) and the Netherlands (€279.93 million) remained the top three national markets for online alternative finance by market volume in Europe, excluding the United Kingdom.

  • For the fourth year in a row P2P Consumer Lending accounted for the largest market share of European Alterative Finance (excluding the UK). This model accounted for 41 per cent of all volume and grew by 99.8 per cent from €697 million in 2016 to €1.39 billion in 2017.

  • Online alternative finance for businesses across Europe continued to grow, providing €1.66 billion to over 24,000 businesses. Overall, European business funding grew by €534 million, and raised funds for an additional 9,586 businesses.

  • Internationalisation of platforms is on the rise. In 2017, 88 per cent of platforms reported some level of cross-border inflows, while 61 per cent reported outflows. This represents a growth of 11 per cent for platforms reporting cross-border inflows, and 17 per cent growth for those reporting cross-border outflows. Despite growth in international orientation of platforms, the extent of actual localisation of services, interface and brand remains limited.

  • While in 2016, models that were associated with larger volumes reported a higher level of change to their business model, the opposite trend was observed in 2017. For the top five model types by volume, 50 per cent or more of platforms reported making no changes to their business model. Product innovation, however, was high across the board.

  • As was observed in the previous year, most innovation focused on improving the operational efficiency of platforms through process streamlining and automation, as well as optimising payment processing and customer verification. Additionally, as with last year, the secondary research focus for platforms in Europe regards investment and development in customer service features, predominantly social media and promotional tools, community management, and CRM systems.

  • As regulatory regimes across Europe continue to develop, so to do the perceptions of platforms on the adequacy of these regulations. In general, while overall views are still divided, it appears that the level of approval has been increasing.

Free download available HERE

Ziegler, T., Shneor, R., Wenzlaff, K., et al. (2019). Shifting Paradigms - The 4th European Alternative Finance Benchmarking Report, Cambridge, UK, Cambridge Centre for Alternative Finance.

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Cambridge Centre for Alternative Finance

2018

Expanding Horizons:

The 3rd European Alternative Finance Industry Report

  • France, Germany and the Netherlands remain the top three national markets for online alternative finance by market volume in Europe (excluding UK), ). The French market reached €443.98m followed by Germany (€321.84m), the Netherlands (€194.19m), Finland (€142.23m), Spain (€130.90m), Italy (€127.06m) and Georgia (€102.58m), which experienced a boom in 2016. The United Kingdom maintains its position as the main alternative finance market, albeit with a declining market share from 81 per cent in 2015 to 73 per cent in 2016.

  • Estonia ranked first for alternative finance volume per capita with €62.68 for a second year in a row, followed by Monaco (€50.78) and Georgia (€27.58). On a per capita basis, France and Germany place twelfth and fourteenth, which contrasts to their positions when analysed in terms of absolute volume generated. Considerable shifts in overall rankings indicate that even countries with smaller online alternative finance volumes may have greater penetration and usage of these models. In almost every instance, high total volume does not necessarily reflect a strong correlation with per capita distribution rankings.

  • P2P Consumer Lending accounts for the largest market segment of Alternative Finance in Europe (excluding UK) for a third year in a row. This model accounted for 34 per cent of all volume, and grew by 90 per cent from €366m in 2015 to €697m in 2016. P2P Business Lending (17 per cent of market share), Invoice Trading (12 per cent), Equity-based Crowdfunding (11 per cent) and Reward-based Crowdfunding (9 per cent) rounded out the top-five performing models across the region. .

  • Institutionalization grew considerably from 2015 to 2016, with 45 per cent of P2P consumer lending and 29 per cent of P2P business lending funded by institutions such as pension funds, mutual funds, asset management firms and banks. 13 per cent of the investment in equity-based crowdfunding was also funded by institutional investors such as venture capital firms, angels, family offices or funds.

  • Online alternative finance for businesses continued to grow, providing €1126m to 14,521 businesses across the region. Debt models (including P2P Business Lending, Invoice Trading, etc.) accounted for 67 per cent of all business finance, while equity models (Equity-based Crowdfunding, etc.) accounted for 27 per cent. France (€218m), the Netherlands (€182m), Spain (€100m), Germany (€97m) and Italy (€88m) drove business-based alternative finance volumes, supporting their SME market through a variety of models

Free download available HERE

Ziegler, T., Shneor, R., Garvey, K., et al. (2018). Expanding Horizons: The 3rd European Alternative Finance Industry Report, Cambridge, UK, Cambridge Centre for Alternative Finance.