Industry Analysis - April 12, 2023

Online Startup Investing in Q1 2023

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.

About: Teddy Lyons

Teddy comes to KingsCrowd with a background in venture capital and investment banking. He worked at Deutsche Bank as an Investment Banking Analyst in the Technology, Media, and Telecommunications group. Prior to that, he served as an Associate at Alchemi Capital, a venture capital firm in Boston that invests in early-stage technology companies. Teddy holds a degree in Economics and Psychology from Wesleyan University, where he was captain of the varsity soccer team. He is currently enrolled in the M.S. in Finance program at Boston College.

View more articles by Teddy

Other Articles

Five Debt Crowdfunding Platforms Investors Should Know

Investors have many debt crowdfunding platforms to choose from, and… ...

New Deals for the Week Ending 04/10/2022

The latest startup investment deals from more than 20 platforms… ...

Crowdfunding and the Coronavirus

In the first quarter of 2023, a… ...