2020 Crowdfunding trends: COVID and beyondDec 16, 2020
It’s almost not worth saying that 2020 has been an interesting year. But, while you cannot avoid COVID there is also a lot to say besides it.
From a Crowdfunding perspective, COVID has clearly had an impact as it has on every business, in every country across the globe. But at the same time, it has also been a fascinating year in terms of some of the trends that have emerged and the types of businesses that we have seen raising successfully across the platforms.
Here Are Our Top Five Sectors In No Particular Order:
Subscriptions have been huge this year. One of the areas we have seen a lot of businesses emerging in is pet subscriptions. Some of these are food-related, like Different Dog who we worked with in March this year, as COVID was emerging, and others more general wellness related. The subscription trend has not gone unnoticed in the media, even the Daily Mail has picked up on it. With most of us being confined to our homes for at least three or four months of this year, this is one sector where growth is likely to continue to be very strong.
Wellness has been a trend for a while and this year we have seen more and more businesses starting up in this space. One big area for growth has been around CBD products but we have also seen growth in app-based services around mental health and fitness - specifically running. Again we suspect COVID has had something to do with this because running has been one of the few things we have been able to do this year. We are also working with a few clients in this space behind the scenes, and look forward to supporting them in launching their campaigns in Q1 and Q2 of 2021.
Again a long term trend but one that shows no signs of abating. What is interesting is the way that sustainability and ethical business is being added as a differentiator. A good example of this is our previous client, Ticketpass who is a ticketing platform with an ethical twist. Every time you buy a ticket on their platform 50% of the admin fee is donated to charity. Another example of a previous client from 2020 is BEEN London who makes luxury leather goods from materials that would otherwise end up in landfill. The popularity of sustainable businesses can also be seen in our current client GIBIE who make home linens using Ayurvedic dying techniques, avoiding harmful chemicals being flooded back into the world’s water systems. Their campaign is currently exceeding their minimum target, and they’re 295% funded with a few days to go.
Again a sector that has been big for a while but the trends within it are interesting. We are seeing a lot of companies springing up in the insurance sector which had been quieter for a while. Start-up banks are also still trending but there are some interesting themes around how they are looking to differentiate themselves using sustainability, or ethical investment. We look forward to supporting some of our current Fintech clients preparing campaigns to launch in 2021.
This is a sector in which we have definitely seen an uptick as the pandemic has rolled on. Perhaps linked to general anxiety about health start-ups offering self-diagnosis kits or health and wellbeing tests are on the rise. This ties into the wellness trend but also reflects a growing desire to take control of your health and an interest in the data.
Of course, some sectors have not fared so well this year. Unsurprisingly we have seen a significant drop in the number of companies from hospitality looking for funding. Anything experiential has also seen a big decline. But, we are hopeful that a turning of the tide in 2021 will see opportunities for these companies to pick up again and investment interest increase.
Initially, the pandemic also influenced the type of investors that we were seeing putting funds in. Smaller investors pulled back but larger investors stayed pretty active. As the initial lockdown ended however the smaller investors started to return and we have seen that trend continue.
One significant trend that has impacted us (in a positive way) has been the growing acceptance of online not just as a commerce platform but also as a way of learning new skills and consuming services. Before lockdown we delivered our services face to face or on the phone, but our recently launched online coaching services are proving hugely popular. We are still there for one-to-one support if needed of course but the online learning platform gives clients a different way to engage and one where they can enjoy increased flexibility.
Although there have certainly been some interesting trends this year one thing is clear; successful crowdfunding still relies on the same basic rules. Your network and your ability to engage them is still key. The work doesn’t stop once the campaign is live and your ability to keep that network engaged even after the funding round has closed is critical in the longer term. And we don’t see that trend changing anytime soon.