Helsinki-based crowdfunding service Invesdor is expanding its operations into Sweden. Two Swedish companies have decided to seek growth funding through the service.
Invesdor is Northern Europe’s first open, share-based crowdfunding service. The service, launched in May 2012, has been available in Finland, Denmark and Estonia and has now been restructured to correspond with Swedish legislation.
Crowdfunding is based on collecting small sums of money from a large number of people through an internet service. In practice, share-based crowdfunding means the accumulation of capital through crowdfunding. Invesdor itself describes it as making equity investments in unlisted companies.
The company’s goal is to enable people who either have no interest in or do not have the funds to operate as a business angel to invest in growth companies. The minimum sum that can be invested through the web service is 20 euros.
According to Invesdor’s Chairman Lasse Mäkelä, present financing models are insufficient for meeting the funding needs of growth companies.
― Services like Invesdor are making a name for themselves alongside existing financial instruments, enabling anyone to support the activities of growth companies. Through our web service, people can make investments while sitting on their sofas at home, Mäkelä explains.
Growing markets and stiffening competition
Presently the company’s focus is on Northern Europe but it has not ruled out the possibility of expanding to other markets in future.
― The main inhibiting factor is sorting out all of the legislation in force in various countries. A variety of rules and requirements exist, even just inside the EU, Mäkelä explains the challenges related to expansion.
These are not small markets we are talking about. According to some estimates, the value of the crowdfunding markets could escalate up to USD 6 billion before the end of 2013.
The growing markets also mean stiffening competition. Several hundreds, if not thousands, of American reward-based crowdfunding services like Kickstarter are already out there, according to Mäkelä, and the markets are opening up to other crowdfunding models.
Within less than a year, EUR 145 000 has been invested in Finland through Invesdor’s service.
― Reactions have been extremely positive. Companies and private investors alike agree that this is a viable option for attaining capital, one that complements the traditional offering, says Mäkelä.