Industry Analysis - October 20, 2021

1000% Growth in Online Private Market Investors

One of the great strengths of the new equity crowdfunding market is that it opened up startup investing to people who previously could not access this asset class. Regardless of experience, retail investors can now help shape the future through investments in exciting startups. Access to startup investing doesn’t guarantee the widespread adoption and popularization of this asset class though. How has investor activity changed over the past few years? In this Chart of the Week, we analyze investor growth in the online equity crowdfunding markets. Our data set is pulled from a variety of crowdfunding platforms that publish investor statistics and covers from 2018 through September 2021.

Online Equity Crowdfunding Investors Over Time

The number of investors participating in online startup investing has grown substantially since 2018. In particular, we saw notable upticks in mid-2019, mid-2020, and early 2021. It’s been widely reported that activity in the stock market grew substantially during the COVID-19 pandemic. The same activity can be seen in the online private markets. Beginning in May 2020, the number of monthly investors grew by 45% — jumping from 83,000 to more than 120,000. That growth held steady throughout the remainder of 2020 and continued in the beginning of 2021. April 2021 has been the strongest month on record with more 300,000 investors participating in online equity crowdfunding. On average, around 250,000 investors are funding startups each month in 2021. 

This clear growth in the online private markets proves that retail investors are interested in diversifying their portfolios beyond traditional stock market investments. The democratization of startup investing is happening in the online private markets, and it shows no signs of slowing. From just under 18,000 investors in January 2018 to 253,000 in September 2021, investors are creating the future everyday by investing in startups and founders they believe in. 

Note: all data used for the Chart of the Week comes from the KingsCrowd database and represents a snapshot of the crowdfunding market.

About: Carolyn Price

Carolyn is passionate about mission investing within the startup ecosystem. Prior to KingsCrowd, she was a founding team member at Rentearn, a proptech startup that makes real estate investing more efficient and equitable for inexperienced investors. Carolyn also co-founded a fintech startup, which was accepted to and funded in MIT Sloan’s accelerator program, that makes long term investing simple for university students. Carolyn holds a degree in Economics and Political Science from Wellesley College. In her free time, she enjoys practicing yoga, stand up comedy, and surfing.

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