European alternative finance market could reach EUR 7 bln in 2015- report

According to a new report produced by the Centre for Alternative Finance at University of Cambridge Judge Business School and professional services organisation EY (formerly Ernst & Young), the European online alternative finance market grew by 144% in 2014, and is expected to grow more this year.

The report includes input from 14 national or regional industry associations, such as the European Crowdfunding Network and the CrowdfundingHub, as well as 255 platforms in Europe, covering an estimated 85%-90% of Europe’s online alternative finance market. While previous studies have charted alternative finance in the UK, this report is the first to cover other European countries in detail.

Seen until recently as a niche activity, online alternative finance, including equity-based crowdfunding and peer-to-peer business lending, has become a vital and increasingly commonplace source of essential funding for many businesses throughout Europe, says the report.

Online alternative finance grew across Europe from EUR 1.21 billion in 2013 to EUR 2.96 billion in 2014. The overall European alternative industry is on track to grow beyond EUR 7 billion if the market fundamentals remain sound and growth continues at current rates, the study adds.

The report also points out that the volume of online alternative business funding has been growing steadily at around 75% year on year, and the estimated number of businesses funded in this way has been growing at an even faster average rate — 133% over the last three years to around 5,801 companies in 2014.

The new Centre for Alternative Finance provides a disciplined research framework to support the structures and activities of alternative finance, in order to address the growing needs of academics, policymakers, regulators and industry. The Centre plans to launch a research programme, host a Global Alternative Finance Data Depository, and organise conferences, networking events and a fellowship programme.