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Is Culture Killing Equity Crowdfunding in Canada?

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Crowdfund Insider by NCFA Ambassador Bret Conkin | August 17, 2015

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American culture is known for celebrating “winners.”  Canadians are known for being modest and risk averse.  Could this cultural difference explain why Canadian equity crowdfunding appears to be relatively underdeveloped so far?  We checked out the funds actually raised in 2015 and talked to some of Canada’s leading platforms and experts to find out.

Part I in the series takes a snapshot of market metrics and traction so far in Canada.  Part II drills down on some of the causes and lessons to be learned from other more developed markets.  Part III takes a specific look at the Real Estate sector.  

A market snapshot – Canada vs. US

The equity crowdfunding market was pegged at $1.1B in 2014, growing by 182% from 2013, according to industry researchers Massolution.  CNBC reported that Equity crowdfunding in the US in Q1 2015 rose to $662 M, driven by fast growing real estate platforms like Realty Mogul and FundRise.

So, given this explosive growth, one could reasonably expect that Canadian have tapped into this new funding phenomenon too.  Have they?

If we straight-line project total 2015 capital raise in the US based on the CNBC estimate, we could project a number of $2.65B USD.  With current growth, it could be much higher.  With a Canuck population that roughly approximates 10% of the US, we could peg a relative estimate for Canadian capital raise at $265M USD in 2015, or $347M Cdn.

Related: Crowdfunding Market Grows 167% in 2014, Crowdfunding Platforms Raise $16.2 Billion

Narrowed to two calendar quarters, that total projects to $174M Cdn.  While not scientific, these estimates are intended to shed some light.  Of course there are other important traction indicators such as platform activity, deal flow and user growth, media coverage and the regulatory environment.

So how are we doing?

The Canadian market so far

As of August 14, there are currently 7 equity platforms operating in Canada that have or have had live offerings.  (Note: not including debt platforms). The US market boasts dozens and dozens of equity platforms including those set up for intra-state use.  Let’s segment the market into:

  • Startup/SME,
  • Later stage,
  • Impact investing and
  • Real Estate.

A) Startups/SMEs

 A couple platforms are targeting early stage/SME ventures and both accredited investors and retail investors.  SeedUps Canada (Calgary) launched early 2014 and Frontfundr (Vancouver) in Spring 2015.

SeedUps has 4 offerings live in early August with jumpOn!! Flyaways 25% funded to date ($31,250 of $125k target).  A prior raise for JumpOn netted another $60k.  On an encouraging note, more than 1500 users have registered including many investors.

Related: Certain Canadian securities regulators to adopt start-up crowdfunding exemptions

SeedUps also recently announced a raise for their platform, a walk the talk strategy completed very successfully in other markets. As Sandi Gilbert noted in a recent blog post flagging VCs, Angels and Investment Funds, “Why isn’t Canada embracing [crowdfunding].”

SeedUps CEO Sandi Gilbert comments indicate that culture is not the key barrier, “The space is very new in Canada – with SeedUps being the lone voice for early stage investment until recently. The Canadian public in general, isn’t even aware that they can invest in deals online. So – getting the word out is important.”

Frontfundr has 3 offerings live and claims $740k total invested to date.  Only Guusto Gifts, via the Startup Exemption requirements requires a minimum threshold ($20k in this case), so the funds noted will likely reach the ventures.  Of the $740k, most has been raised offline.  Another 10 ventures are queued up in The Sector Lounge.

As Frontfundr CEO, Peter-Paul Van Hoeken echoed in a recent Globe & Mail piece, “Canada is conservative… It’s a process to create a crowdfunding market.”  He added, “We don’t think the cultural difference is a primary factor.”

Related: Landscape changing in equity crowdfunding across Canada

Other platforms that have announced intent to launch in this space include CrowdMatrix, CrowdFuel, iCrowdX and CanaDragon.

Let’s sum that segment as roughly $1.5M raised.  Not very much money has changed hands but considerable platform activity and user growth and interest is indicative of much more to come.  Media coverage and industry events have accelerated too.

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B) Later stage ventures

The OCMX (Toronto) offers “institutional” crowdfunding for later stage ventures and has operated since 2009.  InvestX/WaverlyIX launched a Private Equity platform late 2014 focused on Canadian and US investors. ECNCapital (Calgary) has been live for several years with their private capital network.

The OCMX claims to have raised nearly $30M in the first quarter on BNN.  They did about $20M last year.

Some might say that what The OCMX is doing is more corporate finance or investment banking than “crowdfunding” often defined as small amounts raised from a large number of people online.

InvestX does not publish their metrics but of their 2 current deals – lyft has raised $402k of $604k and Spotify has raised $360k of $370k.  However, based on communications InvestX appears to be allocated only a portion of these raises by their PE partners.  There were a couple of earlier deals this year, as well.

C) Impact Investing

SVX, Social Venture Exchange, launched early 2014 and targets accredited impact investors.  SVX claims to have “mobilized” $3.5M in impact investments from over 100 investors for 26 impact ventures and funds in Ontario.  SVX recently announced expansion into Quebec.

Backed by an impressive list of partners including MaRS, TMX, RBC and The Rockefeller Foundation, expect further regional expansion.  With the ability to tap the philanthropic and profit levers of Canadian culture, the future for SVX appears bright.

D) Real Estate

Open Avenue (Toronto) has been live since 2014 with capital raised to date not disclosed.  This sector will be covered in Part III of the series.

In Summary

Defining what is “equity crowdfunding” and what should be counted is one of the challenges in assessing market size. As Craig Asano, Executive Director, National Crowdfunding Association of Canada, states, “The challenge is the definition of what’s included (and what’s not) in the aggregate count.  I think platforms/transactions that are openly raising funding under the equity crowdfunding banner should be counted.”

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Bret Conkin - Is Culture Killing Equity Crowdfunding in Canada?About the Author

Bret Conkin is the Founder of CrowdfundSuite, a CrowdInvesting and Crowdfunding Consultancy. CrowdfundSuite provides platform development and other expert services to help organizations profit from the new Crowd Economy.  Bret is an Ambassador to the National Crowdfunding Association of Canada and a former executive with FundRazr.  He has founded and collaborated on multiple tech start-upsincluding Canada’s first Crowdfunding platform Fundfindr launched in 2008.


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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country.  NCFA Canada provides education, research, leadership, support and networking opportunities to over 1100+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  Learn more About Us or visit

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