In Q1 2022, the venture sentiment decreased significantly from Q4 of 2021 but remained in positive territory.
Crowdinvesting as we know it today, began to gain traction in the wake of the 2008 global financial crisis, as raising capital through traditional institutions was becoming evermore difficult. Crowdinvesting was originally seen as a much-needed solution to the long-standing funding gap but this model soon proved itself as a legitimate source of investment. Although crowdfunding and crowdinvesting have experienced significant growth in recent years.
We want to give you an insight about Alternative Finance and especially about the European crowdinvesting market. As terms of Alternative Finance are often used wrongly, we want to give you first an overview of the three most common types:
What is crowdinvesting?
- Equity-based: purchase of company shares, usually from early-stage firms to investors.
- Mezzanine-based: debt capital that gives the lender the right to convert to an equity interest if the loan is not paid back on time and in full.
- Debt-based: lenders receive a non-collateralized debt obligation, typically paid back over an extended period of time. Similar in structure to purchasing a bond, but with different rights and obligations.
- Others: ghost shares, profit-sharing, exit-participation etc.
What is crowdfunding?
- Donation-based: no legally binding financial obligation incurred by the recipient to the donor and no financial or material returns are expected by the donor.
- Reward-based: backers have an expectation that recipients will provide a tangible (but non-financial) reward or product in exchange for their contribution.
What is peer-to-peer lending?
- Business lending: debt-based transactions between individual or institutional investors and existing businesses (usually SMEs).
- Consumer lending: debt-based transactions between individuals, most commonly unsecured personal loans.
Alternative Finance in Europe
In 2014, the cumulative European market size for alternative finance added up to €2,955.3m. Overall the whole sector grew by a 3-year average growth rate of 146%, which was made up by an increase of 149% from 2012 to 2013 and 144% from 2013 to 2014.
A closer look at the transaction volumes of different alternative finance models reveals that the market’s sustainable growth stems from its various sub-markets. From 2012 to 2014 most of these doubled in size, whereas individual ones even tripled (peer-to-peer business lending, invoice trading, and crowdinvesting). Thus, the European alternative finance market certainly has achieved strong and diversified growth.
Market Potential for Crowdinvesting
In years past, crowdfunding as a means of financing a business was more of a novelty. Today, announcing a crowdfunding campaign is just as common as any other traditional financing possibility, if not more so. With a market size of €173.6m, in 2014 it is difficult to overlook its macroeconomic importance. However, crowdinvesting has already overtaken crowdfunding in terms of volume. Following the previously introduced taxonomy, the market potential for crowinvesting has increased steadily over the past few years. With an average annual growth rate of 195% over the last three years, the European market for crowdinvesting has developed rapidly, from €24.9m in 2012 to €90.2m in 2013 and €205.2m in 2014. This is particularly remarkable compared to an average growth rate of 129% on the market for crowdfunding. An end of this growing phase is not in sight, as the crowdinvesting market profits from the also fast growing startup ecosystem in Europe.
If you are interested in learning more about Crowdinvesting in Austria, Switzerland and Germany, the legal framework behind it, and further trends in the market, we highly recommend you to download our 100% free report on Alternative Finance.
What is IoT? Internet of Things is one of the most trending buzzwords in the venture ecosystem. Sometimes people refer to it as “Internet of Everything” or “connected everything”. Although the word is used in all kind of different contexts, people have still difficulties to understand IoT as a whole. We at Venionaire approached this area through our Insight about Internet of Things with the aim to give a complete overview.
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Corporates investing in IoT
But not only the venture ecosystem is ignited by it – corporates are as well heavily focusing on it. In fact, Cisco began with operations related to IoT in the early 80s and one of the giants, General Electric, committed themselves (through their subsidy GE Digital) to be a “truly” digital industrial company. IoT is actually easy to describe as a network of physical objects, which are able to communicate, sense or interact with each other. In other words: the connectivity is not limited to PCs and mobile phones anymore, but literally every physical object. These connections occur in different contexts. For example: if you start connecting machines in a manufacturing plant, people will refer to it as Industrial IoT, or if you put sensors on your body to track your health condition, people will refer to it as quantified self (sub category of IoT). These examples give you a glance at the importance of IoT in terms of cross-industry applications.
IoT is igniting the tech industry
The borders between the tech and other industries are blurring and IoT is one of the major drivers. Cisco predicted a total impact of IoT by 2022 in 14.4 Trillion Dollars! The thing is, IoT even goes further. It doesn’t only affect traditional industries as illustrated above – it is igniting the tech industry itself. We all talk about big data, machine learning, cybersecurity or enterprise mobile applications. In fact, IoT is building on these tech-sectors. Just take the case of connecting machine in a manufacturing plant. You will need big data software to analyse the flood of data the machines are producing every second. You will eventually need machine learning algorithms to interpret the data and convert into information. You will need cyber security software to enable safe communication and prevent hackers to achieve control over your plant and eventually you will need a mobile application, so the plant manager is able to interact with the system.
These are just few examples of IoT applications using other tech applications. The key in investing into IoT is to understand the different technological layers of it and at the same time mapping the influence of every layer to the different industries (tech included).
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In the modern age, increasing global awareness of the need to minimise pollution, curb worsening climate change and reduce dependence on oil and petroleum products has begun to fundamentally change the outlook of several key industries such as utility, manufacturing – and mobility.
With this report we want to give you an insight of recent and future developments in the E-Mobility sector. The e-mobility sector can be divided into two main segments:
- Electronic Vehicle Manufacturing
- E-Mobility Infrastructure
The largest driver of the e-mobility sector continues to be car manufacturers, with a strong backing by governmental bodies globally, who mostly see e-mobility as part of the solution to reduce global warming. While public sponsorship and financial incentives set by national governments vary country to country, three main cornerstones can be identified as:
- Direct purchase subsidies
- Annual or reoccurring fee discounts
- Income tax incentives
Utilities will play an important role in the provision of infrastructure, and in addition to power management, will likely look to provide the following services to enhance their market position:
- Installation of public charging stations
- Installation of private charging stations
- Value added services
Space providers are the largest supplier of public charging stations, with:
- 19% found in car parks
- 13.1% found on public roads
Electronic Vehicles can be divided into four main subgroups bases on their powertrains
- Hybrid Electric Vehicle (HEV)
- Fuel Cell Electric Vehicle (FCEV)
- Battery Electric Vehicle (BHEV)
- Range extended Electric Vehicle (REEV)
With the market still being in an early stage, the main focus of most car manufacturers remains to be research and development, with:
- $7 bn
- Spent on R&D between 2008 and 2014
Batteries are going to be a key driver of future production, with an emphasis on lowering the cost, and increasing the performance. However, the mass consumer remains relatively hesitant to purchase an EV, with decreased convenience, and cost and risk of adoption being major factors.
Situation in Austria
Austria’s regulatory incentive landscape is currently very fragmented. There are only a few approaches which cover all nine federal states. Listed are the top three incentives, which are valid in all federal states of Austria:
- Electric vehicles are exempt from fuel consumption tax, monthly vehicle tax, and the 16% acquisition tax
- Sponsorship from Kommunalkredit AG of up to EUR 20,000 for the purchase of electric vehicles applicable for companies, entrepreneurs, associations, public regional authorities and confessional bodies until December 31, 2020
- Sponsorship from Kommunalkredit AG of up to EUR 20,000 for the purchase of electric vehicles of public interest (such as taxis or car sharing vehicles) for companies, entrepreneurs, associations, public regional authorities and confessional bodies until October 2015
Certain Austrian federal states provide individual tax and fee incentives depending on various circumstances.
If you are interested in knowing more about the situation in Austria, the global comparison of Incentives and the regulations we highly recommend you to download our free report on E-Mobility.