Swedish Crowdfunder, FundedByMe, Eyes Global Investor Market

The crowdfunding concept has swept the world, but for the most part – aside from a few global brands such as Kickstarter and Indiegogo – even the biggest platforms tend to focus on audiences within their own national boundaries. There are some good reasons for this. Most early stage businesses start out by targeting their local marketplace. And given that businesses often use crowdfunding as a means to enhance their profiles and attract customers while also raising cash, concentrating on domestic investors makes perfect sense. There are potential regulatory issues too. Equity crowdfunding and its close sibling peer-to-peer lending are now firmly on the radar screen of policymakers. Any platform promoting itself and its businesses abroad must be mindful of the laws and practices of other jurisdictions. But a national focus by definition imposes limitations on the size of the investor pool, which can be frustrating for a business struggling to meet its target figure. Arguably that frustration is more acute for companies seeking to raise finance in regions with a relatively low population, such as Scandinavia. On the other side of the equation, a potential fund in, say, Hong Kong or Thailand is going to have, at best, limited opportunities to seek out potential peer-to-peer or crowdfunding opportunities in, say, Germany or the UK. But crowdfunding platforms are beginning to push beyond their national boundaries. Witness Fundedbyme, a Swedish platform that is today announcing the launch of a new peer-to-peer loan product which will be rolled out and to global audience of lenders. Branching Out Fundedbyme has been operating from its Stockholm base for the last four years or so, and during that period it has raised 100,000,000 SK from investors, not just in Sweden but from all over Europe. Although primarily focused on reward and equity crowdfunding it has developed a peer-to-peer lending platform, which has been available to German investors. Fundedbyme's new peer-to-peer product promises an quick and simple sign up process for entrepreneurs in which they provide information on the business and the borrowing requirement. This is used by the platform to create a risk profile, which in turn is the basis for a recommended interest rate. The process for lenders is intended to be equally simple, with individuals providing the details necessary to conform with international lending and borrowing regulations. The rates available to investors range from 0.93% through to 13.3% but according to Fundedbyme, the return is unlikely to be set at anything less than 1.6%. So in common with other peer-to-peer sites, Fundedbyme says it can offer investors better rates than they could expect from, say, a bank deposit account while entrepreneurs have access to cash, potentially at lower cost than would be the case from traditional lenders. Potentially the process is much faster than applying directly to a bank and going through the protracted process of negotiating with account or relationship managers and then waiting (perhaps weeks) for yes or a no from the credit committee. But perhaps most importantly, the platform is giving Swedish companies to reach out beyond their home market. According to Marketing and Communications manager Maciej Szulc, this is an important consideration. “Due to the fact that Sweden is a relatively small country, the international development is a part of a long-term strategy of every company located here.” Added to that, of course, is the fact that a larger pool of investors increases the chance of raising the necessary sums of money. Fundedbyme currently has representatives working in seven countries and has already attracted investment from 47 jurisdictions. According to Szulc, this existing network will be used to promote the international peer-to-peer lending product, using the internet as the main marketing tool. Beyond Europe, Asia is seen as a particular important region. The company is aware of the need to remain compliant with investment rules. However, with peer-to-peer lending legal in it's home country , the new platform will operate under Swedish rules. Having taken legal advice . FundedmyMe does not expect to encounter too many legal problems. However, it is rolling the international service “iteratively” to assure users that there will not be any “additional risks.” Such has been the publicity surrounding crowdfunding that the leading individual platforms – such as Seedrs, Funding Circle and Crowdcube here in the UK - have built well recognized brands in their home nations. As platforms flex look beyond borders it will be interesting to see if those brands can be scaled up internationally.