France, a powerful leader in European crowdfunding

At a time when the European Union is considering unifying the rules of crowdfunding, Brexit could position the French market at the top of the 27. In this perspective, French leaders are well positioned to become continental players.

A 50% increase between 2016 and 2017! This is what France Financement Participatif was able to measure during a recent survey on crowdfunding in France. With €336 million raised, crowdfunding represents a third of alternative finance in France (€940 million). The environment and real estate are the most financed sectors, with 90% of the funds raised being directed towards the real economy. Although dynamic and with no reason to be ashamed of its performance, the French market nevertheless remains far behind the United Kingdom.

A losing leadership

A leader, with more than €5 billion raised in 2016, the United Kingdom is apprehending the already very real effects of Brexit. The British economy has already experienced a 2% contraction since the 2016 vote, representing a loss of around €40 billion according to the Governor of the Bank of England. In this context, it is now highly likely that the cards of the European crowdfunding market will be reshuffled in the coming months. French attractiveness could thus be reinforced by the emergence of players with continental ambitions.

Dynamic neighbors

While French crowdfunding is doing well, the same phenomenon is observed, sometimes on a smaller scale, in other countries of the Union. From the Netherlands (€223 million) to Germany and Spain (around €200 million), via Austria (€28.8 million), Belgium (€22 million) and Italy (€12 million), a constant emerges: strong growth and markets that are far from having reached their stage of maturity.

Towards a structuring of the European market

Aware of this potential, the Commission had already looked into the issue in a note with the evocative title "Unlocking the potential of crowdfunding in the European Union." The document took stock of a sector in which "only 38% of platforms with financial remuneration [...] carry out cross-border activities, while almost half of them would like to extend their activities to other countries of the Union." The main obstacles identified were a lack of information and costs. Based on this observation, the Commission proposes establishing a European crowdfunding passport. A regime that would only apply to projects financed by platforms for a maximum amount of one million euros (calculated over 12 months).

What is the timetable?

The implementation of this new status will not be immediate. It will take at least two more years for its final adoption, while the European legislative debate takes its course. By then, the Commission's proposal may be able to take into account the comments of French crowdfunding stakeholders who, through Financement Participatif France, have already sent a response to the Commission's proposal. The stakes are high: a market worth several billion euros in which the French leaders in the sector have everything to gain.

Cyrille Arnoux, web editorial manager