The prospective growth of crowdfunding in developing countries could hit £50-55 billion within the next twenty years, according to a World Bank report.
New UK equity crowdfunding platform Emerging Crowd will look to be at the forefront of that growth. The platform is scheduled to launch in October 2014 following authorisation from the FCA. Although based in London, Emerging Crowd will initially focus on funding businesses in emerging and frontier markets. These markets include Sub-Saharan Africa, Central Asia and South-East Asia, as well as countries that have demonstrated economic and political stability, reliable framework, regulatory conviction and market solidity. Businesses within these markets can raise anywhere between £500,000 and £4m via the platform.
Emerging Crowd is looking to take advantage of what it estimates to be 3 million “DIY investors” currently operating in the UK – a number it sees rising to 5.5 million by 2017. The platform will facilitate investments in carefully selected companies that maintain a high financial performance, as well demonstrating strong prospects for growth alongside strong corporate governance and short-term liquidity options.
“For established growth companies in emerging and frontier markets, traditional cross-border fundraising models often fail to provide the necessary transformational capital. Even the best companies are not adequately served by conventional banking and brokerage models. We have created Emerging Crowd to bridge this gap, so that investors can discover and invest directly in growth stage companies from around the world.”
Will Tindall, fellow Co-Founder of the platform, also commented:
“New technologies are greatly enhancing private market efficiencies. Emerging Crowd offers the potential for a major overhaul of a largely institutional framework for allocating capital to companies in emerging and frontier markets. It provides the possibility of leapfrogging the inefficient legacy systems prevalent in the developed world and opening additional sources of funding to these undercapitalised markets.”
AltFi recently caught up with Netherlands-based peer-to-peer platform Lendahand, which is also going after businesses from emerging markets – although it is debt-based and targeting SMEs. Emerging Crowd Founders Moolenaar and Tindall see a big opportunity in emerging and frontier markets – where they would argue that even highly promising and profitable companies routinely struggle to access finance. It will be interesting to see whether more platforms (perhaps an established platform?) look to take advantage of the opportunity.