While 2015 was a strong year for UK equity investment in terms of the total amount invested, the number of fundraisings spiked just 3% from 2014. This is a marked slowdown following three years of sustained double-digit growth and if it weren’t for the continued rise of crowdfunding, then the decline would have been even more serious, says Beauhurst in its the Deal 2015/16 report.
In fact, equity crowdfunding is now the second most active funder type, leaving angel networks and private investment vehicles way behind, the report states.
Toby Austin, CEO of Beauhurst says, “We expect that these platforms have yet to reach their full potential, despite the controversy that they continue to attract”.
Crowdfunding was the only investor type whose deal numbers increased by a significant amount (45%) last year, and the sector is set to facilitate more transactions than ever in 2016.
“As they establish themselves in the mainstream, crowdfunding platform deal sizes will also grow,” says the report. “This may create a virtuous circle of greater investment and greater confidence in the new platforms – larger investments earlier on can mean a new business is less likely to run out of runway and will therefore be more likely to succeed, thereby encouraging new investors.”
