Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share

Crowdfund Insider | By | Dec 20, 2018

reaching new heights 3rd altfi amercias report - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market ShareThe Cambridge Centre for Alternative Finance (CCAF) has published their annual report on alternative finance covering the Americas. According to Reaching New Heights: the 3rd Americas Alternative Finance Industry Report covering data for 2017, across the Americas alternative finance grew by 26% to reach $44.3 billion in 2017. The bulk of this amount was driven by the US accounting for 97% of the Americas market and $42.81 billion.

For this years report, 35 countries in the Americas were surveyed. This included survey submission from 234 unique platforms. In addition, external data was collated from 47 platforms. This represents an increase of 134% in platform coverage for the year.

Robert Wardrop, Director of CCAF, said this year’s report illustrates the uneven yet considerable growth of online alternative finance in many countries across North, Central and South America.

So how does this compare to the previous report, even with the change in platform coverage?

In 2016, CCAF reported $35.2 billion for the year. The growth rate was approximately 23% from the prior year. Throughout the last five years (2013-2017) the average annual growth stands at 89%. Total volume over the last five years amounted to $124.5 billion. Of this amount, 35% came in 2017 alone.

For the US, Consumer Lending was the key driver in the market. Balance Sheet Consumer Lending accounted for $15.2 billion (35.5% of market share) and Marketplace/P2P Consumer Lending accounting for $14.7 billion (34.3% of market share).

Canada, the second largest market, generated $868 million – a respectable amount for a country with a population that is a fraction of the US. The balance between Latin America and the Caribbean was $663 million.

The report notes that Canada saw considerable growth, up by 159% from $335 million in 2016 to $868 million in 2017. The Canadian alternative finance market was driven primarily by alternative business funding, which accounted for 61% of the total.

LATAM and the Caribbean grew by 94% from $342 million in 2016 to $663 million in 2017.

Brazil, Mexico, and Chile drove 78% of the region’s growth, with Brazil jumping ahead of Mexico and Chile to become the region’s market leader.

Not including the US, SME business financing was the clear market driver.

According to the report, 85% (or $566 million) of all alternative finance volumes across the region came from business financing. CCAF states this is particularly pronounced in Chile, where alternative business funding accounted for 27% of the overall Latin America / Caribbean (LAC) business funding market.

See:  While Canada debates, others are commercializing our most valuable asset: data

Diego Herrera, Financial Markets Lead Specialist for the Inter-American Development Bank (IDB), said that many regulators in the region use the series of studies that the University of Cambridge has published with the IDB support to design their policies and regulations.

“In fact, many of the jurisdictions have understood the size of their Alternative Finance ecosystem with this reliable source of data,” said Herrera. “Regulation has become one of the most important drivers for the success of fintech ecosystems in the region through the mitigation of legal uncertainty and the creation of secure conditions for entrants. As the regional ecosystem evolves, so too does the Fintech policymaking and regulatory proposals.”

Juan Ketterer, Institutions for Development Manager, Inter-American Development Bank, added that this year’s report highlighted that alternative finance is a very dynamic Fintech vertical in Latin America and the Caribbean.

“The steady 94% growth is opening the way to the first yearly US $1 billion [total]. The region is using alternative finance to finance businesses with a total of US $566 million out of US $663 million. Alternative finance is part of the solution to close the gap of financial inclusion to more than 45 million Micro, Small and Medium  Enterprises. The inclusion of numbers on gender, showing how, on average, 31 per cent of the fundraisers, while 32% of the funders are female, is a new key result.  We will follow through this critical data to determine the effect of women in the alternative finance vertical.”

Some other interesting data points provided by the CCAF Americas report include:

  • The US is the second largest alternative finance market in the world as it trails China (dramatically). As shared in the CCAF Asia report, China hit US $358 billion in 2017 growing by 47% versus year prior.
  • Real Estate Crowdfunding increased by 128% to $1.8 billion in 2017 from $821 million in 2016. The model accounted for 4.2% of the total market in 2017 and grew by 128% annually.
  • Balance Sheet Consumer Lending accounted for $15.3 billion, up an impressive 409% from the $3.0 billion in 2016. The model accounted for 34.5% of the total market in 2017. This was the largest model across the region.
  • Marketplace/P2P Business Lending registered $1.5 billion, slightly down 0.33% from the $1.5 billion in 2016.
  • Marketplace/P2P Consumer Lending reached $14.9 billion, down 29% from the $21.1 billion in 2016. This model accounted for 33.6% of the total alternative finance market volume in 2017 in the Americas.
  • Equity Crowdfunding accounted for just $260.9 million in 2017, down 54% from $569.5 million in 2016. This sector is stagnating
  • Rewards platforms are included as well. As with the other parts of the world, this sector is in decline down by 26%
  • The research identified 48 platforms that pivoted away from ‘orthodox’ alternative finance models or were no longer active.

See:  Fintech Reports and Research

CI reached out to Tania Ziegler, the Lead in Global Benchmarking at the CCAF. Ziegler manages the Centre’s alternative finance benchmarking program that covers Europe, the Americas, Asia Pacific, and the Middle East and Africa. We asked her a series of questions related to the CCAF Americas report.

CI: Overall, what were your impressions of 2017 v. 2016 for the evolution of alternative finance in the Americas?

Tania Ziegler: 2017 saw a lot of growth across the region, but very much at different levels. In the United States, we observed steady growth (24% up from the previous year) but this driven largely by strong incumbent firms and, in particular, consumer lending activities. We noted that a handful of platform respondents from previous year’s had left the ecosystem for more traditional activities, there was some consolidation in the market, and there was a limited number of new entrants when compared to previous years.

Canada saw exponential growth (159%), with a focus on finance for business borrowers. Unlike previous years, the Canadian landscape shifted away from non-investment model such as reward and donation crowdfunding, towards more sophisticated lending models. We also saw significant investment from Canadian platforms towards R&D activities, especially in process streamlining. Canada seems to have a strong emphasis on innovation-driven activities in lending.

CI: The US continues to dominate in the Americas yet trails China. Why is that?

Tania Ziegler: The US is certainly the market leader in the Americas, but is dwarfed considerably by China (whose market volume was $358 billion in 2017).

Simply put, China’s Fintech market is reflective of a retail investor environment that is far quicker to embrace technology, coupled with somewhat underdeveloped traditional banking options for both individual funders and fundraisers.

Yet, it is important to note that in 2017, we saw a significant slow down in alternative finance compared to previous years.

In our Asia-Pacific report this year, we noted that this downturn comes alongside profound industry shake-ups and regulatory changes. Though technology-enabled altfin models certainly will continue to grow in China, until regulation catches up, we expect that 2018’s figures will be somewhat dampened.

Continue to the full article --> here

Download the Reaching New Heights PDF report --> now

 


NCFA Jan 2018 resize - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market ShareFF Logo 400 v3 - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Sharecommunity social impact - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
NCFA Fintech Confidential Issue 2 FINAL COVER - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share

AiAuthority | Kristina Podnar | Jul 8 2019 It’s hard to overestimate the role of small businesses plays in the American economy: Businesses with fewer than 5 employees account for 62% of all businesses in the U.S. More than half of all Americans own or work for a small business. Small businesses are responsible for two-thirds of all new jobs created each year. When you look at the magnitude of their economic impact, it would be easy to assume that small businesses know exactly what they’re doing and would be the obvious place to look for advice and best practices. The truth, however, is that small businesses power the economy despite lacking the resources of larger organizations: 77% of small businesses rely on the owner’s personal savings for their original funding. Only 40% of small businesses are profitable. The vast majority of businesses that fail, do so because of cash flow problems. Employees of small businesses wear many hats, starting at the top. The owners or leaders of small businesses are typically responsible for three or more of the following functions: operations, finance, sales, marketing, HR, customer service, product development, or IT. When you look at it that way, it’s ...
Read More
digital policy and security - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
Canadian Consulate General in Hong Kong | Eunice Wong | July 16, 2019 [INVITATION] Webinar:  FinTech Market and Opportunities in Hong Kong / Canadian FinTech Trade Mission to Hong Kong @ HK FinTech Week 2019 You are invited to attend a Webinar - Hong Kong FinTech Market and Opportunities on July 23, 2019 (Tuesday)  9:00AM - 10:30AM Toronto Time Join us as we discuss the current Fintech Market in Hong Kong. This webinar will cover the following topics: HK Fintech Market and Ecosystem HK Fintech Opportunities HK Fintech Week 2019 as a platform Canadian FinTech Trade Mission to Hong Kong FinTech Week 2019 Speakers: Mr. Charles Ng, Associate Director-General of Investment Promotion, InvestHK Mr. King Leung, Head of Fintech, InvestHK Mr. Musheer Ahmed, General Manager, Fintech Association of Hong Kong See:  Hong Kong being pulled into the 21st Century — digital banking licenses finally arrive Agenda: Event Introduction by Ellen Cao, Ontario government (10 minutes) Hong Kong Fintech Market by InvestHK, Mr. Charles Ng, Associate Director-General of Investment Promotion; and Mr. King Leung, Head of Fintech (30 minutes) Hong Kong Fintech Market by Fintech Association of Hong Kong Mr. Musheer Ahmed, General Manager (10 minutes) Q&A (15 minutes) Government of ...
Read More
Government of Canada Hong Kong - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
NCFA Guest Post | July 16, 2019 Every day, new startups are launched and another entrepreneur decides to begin building a business. One of the challenges that startups often face is managing their money effectively. Managing business finances can differ from personal finances as one mistake could trigger several issues in your business. Being as meticulous and accurate as possible is one of many ways to grow finances in a healthy way. It’s also imperative that you keep your expenses low which can be done in numerous ways. On that note, here is how you can manage your finances if you happen to have a new startup. Create a Budget Every business that wants to effectively manage its finances needs a budget. This will give you an accurate idea of what your income and expenses look like so that you’re able to spend wisely and plan effectively. Below, you’ll find a couple of tips for creating a budget. Income: Firstly, you’ll need to write down every source of income that your business has. In the case that you don’t have any income yet, create a financial forecast and estimate how much you think you’ll make. Your goal will be to ...
Read More
Managing finances in a new startup - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
Impression Ventures | Christian Lassonde | July 16, 2019 Intro:  NCFA Fintech Confidential spoke with some of Canada’s experienced fintech investors, on their background, how Canada has evolved, what we should be doing, advice to fintech founders and what keeps them awake at night.  This is part 3 of a 4 part series. What is your background, and how did you come to found Impression Ventures? I'm graduated from Western in the mid-90s with two degrees. Comp-Eng and Comp-Sci. I immediately started my own business, excited by the endless possibilities the internet could bring to gaming. I had no idea what I was doing - needless to say, that company didn't work out. But the lessons I learned being a first-time entrepreneur have stayed with me to this day. From there I moved to the Valley, worked for some all-star companies; Electronic Arts, LucasArts, Linden Lab, got an MBA and founded two more businesses, Millions of Us & Virtual Greats. After a decade in the San Francisco area, I moved back to Toronto. After a fourth startup (didn't work out) - I got very interested in the intersection of finance and technology, two businesses sectors Canadian's excel at, but there was ...
Read More
Impression Ventures - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
Coindesk |Michael J Casey | Jul 15, 2019 Let’s be clear: It was not the substance of Donald Trump’s tweet that made his critique of bitcoin and Libra so important last week. It should be of no surprise that this US President would declare himself “not a fan” of “highly volatile” cryptocurrencies “based on thin air” that “facilitate unlawful behavior” or that he much prefers a “dependable and reliable” currency “called the United States Dollar!” (Anyone who assumed Trump would be a “drain-the-swamp” libertarian advocate for censorship-resistant money had an ill-informed view of a man whose government is stacked with former Wall Street execs, who opposes free trade and immigration, and takes a draconian approach to a variety of civil rights and social liberties.) What matters is the very fact that a sitting president mentioned cryptocurrencies at all. Indeed, from a price perspective, Trump’s disparaging remarks are, on balance, positive for bitcoin. By Friday evening, the post-tweet price action reflected that. See:  Fintech Fridays Episode 32: Rallying behind Bitcoin with Frederick T. Pye More importantly, the tweet marks a symbolic milestone in the gradual but ever-expanding presence that cryptocurrency occupies in the public conversation around money and policy. It also marks ...
Read More
donald trump not a fan of bitcoin - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
Cointelegraph | Helen Partz | July 10, 2019 Global payment giant Visa has recorded its second investment in a crypto project by leading a $40 million funding round of Anchorage startup, according to a Fortune report on July 10. Visa has reportedly led the round along with major cryptocurrency venture capital (VC) firm Blockchain Capital to support institutional-grade crypto custody service Anchorage, which previously raised $17 million in an investment led by Andreessen Horowitz. In the new round, both the amount of Visa’s contribution and Anchorage’s private valuation were not disclosed, the report notes. Both Visa and Anchorage are founding members of Facebook’s cryptocurrency project Libra, which was officially revealed on June 18. See:  Ethereum will match Visa in scale in a ‘couple of years’ says founder As Fortune noted, the recent funding round is the second known investment of Visa in a crypto-related firm, with the payment giant having participated in a $30 million funding round in blockchain startup Chain back in 2015 alongside with Nasdaq and Citi. In late 2018, Chain was acquired by Stellar-focused firm Lightyear. The new funding will be used in Anchorage’s mission to provide an alternative to cold storage-based institutional custodies to ensure the ...
Read More
visa invests in crypto - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
The Block Crypto | Frank Chaparro | July 10, 2019 Quick Take The Security and Exchange Commission approved Blockstack’s token offering under Reg A+, an accelerated path for smaller companies to raise money publicly This is the first approval the SEC gave for a token offering, after a series of crackdowns the regulator led against unregistered ICOs it deems as securities The Securities and Exchange Commission (SEC) gave blockchain startup Blockstack the go-ahead today to conduct a $28 million digital token offering under Regulation A+, the first token offering of its kind ever approved by the SEC, according to the firm. The SEC has launched a series of crackdowns on unregistered initial coin offerings (ICOs), with the latest including a dispute with messaging app Kik over its $100 million ICO. Still, Reg A+ offerings have had their own headaches. Reg A+ is a fast track for smaller companies to publicly raise money with less strenuous accounting and disclosure standards than a regular token offering requires. Even so, Blockstack founder Muneeb Ali told the Wall Street Journal that the process is still very long and costly since the SEC had to devise a brand new protocol for token offerings under Reg ...
Read More
Blockstack Reg A token sale 1 - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
NCFA Canada | July 6, 2019 JOIN US ON A STORYTELLING JOURNEY EVERY FRIDAY. Ep34-July 6: Accelerating Fintech Growth HOST: Manseeb Khan, Fintech Friday's show host GUEST:  BRENDAN HOLT DUNN, Founder Holt Accelerator, (Linkedin) BIO:  Brendan is an investment guru who has close to 15 years in managing multi-billion dollar asset portfolios. He is currently the CEO of Holdun, a 5th generation family business which offers family office services, wealth management services, trust services, corporate services, concierge services and financial services and was awarded best Multi-Family Office in the Caribbean 2017 for Holdun Family Office. A tech savvy investor, he has made many investments in startups including Stradigi AI, Addepar, Uber, LeAD Sports Accelerator, Sway Ventures, and Falcon 5. He has accumulated five finance and investment certificates to compliment his finance degree from King’s University College. He’s considered by entrepreneurs to be founder friendly. About this episode: On this week's episode of NCFA's Fintech Friday's Podcast, our host Manseeb Khan sits down with Brendan Dunn the Managing partner of the Holt Accelerator program. They talk about why are accelerators are important, how the can find the right companies and what their Fintech Show is. Enjoy! Subscribe and tune in each ...
Read More
FF EP34 Brendan Holt Dunn - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
CNN Business | Clare Duffy | July 4, 2019 New York (CNN Business)American lawmakers are concerned that Facebook's Libra cryptocurrency may try to challenge the dollar and are demanding the company stand down. They want Facebook to immediately halt development of Libra until regulators have time to examine the plans and "take action," according to a letter sent Tuesday to the company by a group of lawmakers from the House Financial Services Committee. Chairwoman Maxine Waters, a Democrat from California, first suggested a moratorium on development the day Libra was announced. The new letter represents an escalation of pressure on Facebook's digital currency plans, which have also been scrutinized by regulators around the world. Other interest groups have weighed in, too: More than 30 organizations sent a similar request to Facebook on Tuesday, saying US and foreign regulatory systems are not prepared to address questions about "national sovereignty, corporate power, consumer protection" and other issues raised by the project. The lawmakers said they want to hold public hearings on the "risks and benefits of cryptocurrency-based activities and explore legislative solutions." "Failure to cease implementation before we can do so risks a new Swiss-based financial system that is too big to ...
Read More
libra - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share
Bicameral Ventures Release | June 27, 2019 TORONTO, June 27, 2019 /PRNewswire-PRWeb/ -- Bicameral Ventures, the fund powering value creation through their "Interconnected Investing" model, announced today a highly strategic investment in Balance aimed at accelerating its growth. The investment brings Bicameral's portfolio to nine projects that are targeting challenges in various layers of the technology stack, with an aim of delivering superior end-user experiences by leveraging the blockchain and associated virtualized technologies. "Most M&A destroys value, especially as the problems centrally-planned corporations are trying to solve grow increasingly complex. Instead, Bicameral has brought together a group of independent yet 'interconnected' projects working at all layers of this novel technology stack, to attack multiple facets of the largest challenges. Balance, with its unique take on institutional grade custody for digital assets and hyper focus on UX and connectivity, provides an important building block in the delivery of unparalleled end user experiences that leverage decentralized technology," said Alex McDougall, Chief Investment Officer, Bicameral Ventures. See:  Crypto Custody: Our Shared Journey Towards Mass Adoption Balance adds another critical component to Bicameral's unique portfolio of highly complementary projects focused on accelerating Web 3.0 adoption. As a key aspect of executing on Bicameral's "Interconnected Investing" ...
Read More
Bicameral and balance - Cambridge Centre for Alternative Finance Publishes Americas Report: Sector Grows by 26% as US Market Leads with 97% of Market Share