In this section of the report we will review investment trends in equity crowdfunding platforms. The data we are analyzing covers a period of about seven years, from January 2011 to May 2018. The data will primarily focus on equity crowdfunding platforms in the USA and Canada, unless otherwise noted. We selected this longer time period since reducing the sample size to a five-year period, as is common in our other reports, would not have provided a realistic representation of the industry. It is important to understand that we are focusing on investments in the crowdfunding platforms themselves and are not providing figures on the deals that have taken place on the platforms.
According to the data available the busiest year in terms of transactions was 2014, with 32 deals, while the least active year was 2011 with 2 transactions. It is understandable that earlier years did not see a great deal of investment given that the first US-based platform allowing investments directly on the site was launched in 2011. This particular platform did eventually close its doors a year later out of regulatory concerns since they launched prior to the JOBS Act being signed into law.
Investments in this sector are typically made at an early stage. Participants in these early stage investments include accelerators and incubators, angels, seed investors and VC firms with an early stage focus.
From the data we can see that early stage VC funds have made up a large percentage of the investments in numerous years. Angel investors also appear to be taking a closer look at the industry since 2013 when their percentage of total deals dipped from 2012 levels.
When reviewing the amount of capital raised during the observed period we see that nearly $378 million was invested by the various investor groups. 2011 represents the lowest year with only $0.3 million raised, while 2016 is so far the peak year with $111.5 million. Again, this does not come as a surprise given that 2011 was the year equity crowdfunding platforms really started to be developed and the JOBS Act was not signed into law until 2012.
Based on available data at the time this report was created, the following ten crowdfunding platforms have raised the most funds from investors (for the platform, not companies listed on the platform) to date.
As was previously mentioned, the major investors are those who focus on early stage companies. Prior graphs have shown that early stage VC firms and angel investors are very active in the space. For smaller deals it is not uncommon to see a solo investor. However, larger deals, such as CircleUp’s 2015 $30 million Series C, typically have a lead investor and multiple other round participants. CircleUp’s Series C was led by Collaborative Fund with 11 other disclosed participants.
To date, the most active investors are Canaan Partners, Menlo Ventures and General Catalyst.
A few notable deals which took place in the USA include:
RealityMogul.com, an online equity crowdfunding platform for real estate which connects investors with borrowers and sponsors. It allows investors to join the real estate market with reduced risk, time and cost. It raised $35 million in Series B venture funding in a round led by Sorenson Capital on July 14, 2015. Canaan Partners, Pelion Venture Partners, Target Global, Coffin Capital & Ventures, MicroVentures and MITS Fund also participated in the round. The funds will be used to hire more technologists and data scientists, strengthen the company’s technology platform and to expand their geographic presence across the United States
CircleUp Network, developed and operates an online crowdfunding platform designed to invest in start-ups. The company raised $30 million in Series C venture funding in a round led by Collaborative Fund on November 11, 2015, putting the company’s pre-money valuation at $153.42 million. Kensington Capital Holdings, Jon Winkelried, Nigel Morris, John Powers, Tom Glocer, Union Square Ventures, QED Investors, Canaan Partners, Maveron, Rose Park Advisors, Sozo Ventures and other undisclosed individual investors also participated. The funding will be used to develop the company’s product and data teams.
RealityShares, provides an online platform designed to simplify real estate investments in terms of connecting borrowers and sponsors to debt and equity markets, online investments, online performed due diligence. The company raised $28 million in Series C venture funding through a combination of debt and equity led by Cross Creek Advisors on September 14, 2017. CBRE Group, NOVAYA Real Estate Ventures, Danhua Capital, Barry Sternlicht, Bow Capital, Union Square Ventures, General Catalyst Partners, Menlo Ventures and other undisclosed investors also participated in the round. The funding help to deepen focus on the commercial financing market.
Considering both American and international deals, the average deal size is $4.03 million, with a peak of $72 million raised by OurCrowd, whose features are described later in the paper.
From an international point of view, the following are the most successful deals during the period considered.
1. Seedrs – Owner and operator of an online investment platform. The company’s equity crowdfunding platform enables investors to invest in any of the startups on the platform and advise the businesses, earn equity returns if the business is sold, floats or pays a dividend. The company raised GBP 4 million of Series A venture funding in a deal led by Woodford Investment Management on September 4, 2017, putting the company’s pre-money valuation at GBP 40 million. Beacon Capital and 111 Holdings also participated in the round. The company raised GBP 6 million of angel funding via a crowdfunding campaign and GBP 4 million was invested by Woodford Investment Management. The company intends to use the funds to continue to expand its operations and business reach.
2. OurCrowd – is a global equity crowdfunding platform for accredited investors. It operates from Israel and raised $72 million of Series C venture funding from United Overseas Bank and Monash Private Capital on September 21, 2016.
Mario Mosiello contributed to this report.
 PitchBook data found using the following keywords: “United States” or “Canada” or “equity crowdfunding platforms” or “All Series” or “All Round Numbers” or “All VC Stages”
 “OurCrowd Company Profile.” CrunchBase, The Free Tech Company Database, CrunchBase, www.crunchbase.com/organization/ourcrowd.