In the first quarter of 2023, a total of $150.3 million was invested across Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) raises (equity and debt). This is a rise of 14.8% from the first quarter of 2022, which is a positive indication that startup investors are beginning to open up their wallets again and engage with long-term investments.
Dalmore Group took the top spot for equity raises, with $51.7 million in funding. Dalmore specializes in Reg A investments, which tend to have larger raise sizes and larger individual investments than Reg CF raises. Therefore, even though there were only 21 new Reg A deals across all platforms, Dalmore was able to generate more investment than any other platform. When we looked further into this, we noticed that one raise in particular accounted for a large percentage of the amount raised: Slingshot USA. This is a raise for an animated biblical movie about the story of David. The initial previews for the film look fantastic and the company was clearly able to capitalize on this hype and raise a substantial amount of capital.
For debt raises, Wefunder once again took first prize with $1.9 million raised. Wefunder has continually established itself as the dominant player in the Reg CF space, showing its versatility by showing success in both equity and debt offerings.
The top industry for equity raises was Media, Entertainment, and Publishing, raising an aggregate of $56.3 million. Again, this was largely led by the Slingshot USA raise that raised tens of millions of dollars in the first quarter.
For debt raises, Food, Beverage, and Restaurants led the way again with $2.9 million in aggregate funding. Restaurants tend to be the most common type of debt raises. These raises are attractive to investors as they give investors predictable investment returns and a safer position on the capitalization table (since debt holders get paid out first if a company goes under).
The first quarter of 2023 was a positive month for the crowdfunding market. Hopefully we will continue to see growth in dollars invested as the economy continues to recover.
Note: All data on online startup investing used for the Chart of the Week comes from the KingsCrowd database and represents a snapshot of the U.S. crowdfunding market.
