Just a few years ago, if someone stated that their company raised $2.2 million in early funding raised in a single weekend, most people would assume that they were talking about venture capital. You could all but guarantee that they went to speak to a few investors or an investment firm, made a pitch, and secured the big investment. But that is no longer how the world works.
Over the past weekend, Founder Institute Amsterdam graduate Peerby (pronounced Peer-Bye) raised $2.2M in funding from 1051 individual crowdfunders through the Dutch sustainable crowdfunding platform OnePlanetCrowd. Not to be confused with pre-sales crowdfunding platforms like Kickstarter, OnePlanetCrowd is an equity crowdfunding service, which gives individual crowdfunders a stake in companies in exchange for money.
The tech startup reached the ultimate amount of $2.2M only four days after the campaign became public. Both the size and the speed of Peerby's fundraising constitute Dutch records, as the startup secured 669% of its target amount. The crowd is the largest shareholder in Peerby, raising more funds than any venture capital firms or angel investors.
The spirit of crowdsourced fundraising is particularly appealing to a companies like Peerby. The Dutch startup provides a service in the form of a website and app that enables consumers in cities to borrow and rent the things they need from others in their neighborhood. Since its 2012 launch, Peerby has been working to make borrowing a serious alternative to buying. Today, it offers access to over $1B worth of products in over 20 cities in Europe and the United States, and plans to continue expanding with the new funds.
Most importantly, Peerby is a community-strengthening service that relies on cooperation and "the crowd," so the idea that Peerby raised so much funding so successfully on a crowdsourced platform is quite fitting. It is no surprise, then, that the majority of funders are part of the devoted Peerby community. The crowdfunding campaign provided Peerby's passionate users to support the startup in its mission to create a transition towards smarter consumption and increased cooperation.
However, this does not mean that crowdfunded equity is limited to crowd-fueled companies such as Peerby. In 2015, equity crowdfunding as a whole hit $2.6B, which means that the total amounts of equity crowdfunding has nearly doubled each year since 2011. But,equity crowdfunding is not just for crowd-sharing companies like Peerby.
A large variety of companies spanning many economic sectors have also seen success on equity crowdfunding platforms. For instance, Mondo Bank, a disruptive online banking alternative, managed to raise £1M in just 96 seconds earlier this year. By providing startups the opportunity to leverage public interest as well as their communities, crowdfunded equity has emerged as an exciting source of startup funding.
