The number of authorized platforms remained almost the same, with a couple of portals that close down and few new entrants that launched; Starsup, Mamacrowd and CrowdFundMe are the three portals with the highest number of equity crowdfunding campaigns as well the highest amount raised through their online platforms; a clear regulation for P2P lending is now needed to support the growth of the market.
Taking a step back, Italy
moved surprisingly early on alternative finance, with the Commissione Nazionale per le Società e la Borsa, Consob, the Italian securities market regulator, that enacted regulations for equity crowdfunding in July 2013, making Italy the first country in Europe to adopt such a regulation.
Despite that, the market has developed slowly, with only about €3 million raised in the first 3 years. This was due to a number of factors, but it has certainly not helped to have regulations that were broadly considered too restrictive, making raising funds through online platforms and portals an option available to a very limited number of firms.
Although the Consob showed strong interest in the market and made significant improvements to the framework of crowdfunding
regulations over the past years, with amendments made in January 2015 to expand the possibility to raise funds via online portals to “innovative SMEs” and in February 2016 when they tried to significantly simplify the regulations and again earlier this year through the Stability Law for 2017 approved by Italian government, that once in effect will extend access to equity crowdfunding to all kinds of SMEs and increase to 30% the tax deductions for investments in innovative start-ups and SMEs.
However, it should be considered that the Italian market is still in its infancy and these are relatively small numbers compared to those of other European countries
, like France, that excluding the UK, it has the biggest market in Europe. But the Italian market is very small even compared to the market volume of small countries like The Netherlands and Finland.
The chart below displays the 2015 volumes of the online Alternative Finance sector, taken from “Sustaining Momentum”
, a report prepared by the Cambridge Centre for Alternative Finance (CCAF) of the University of Cambridge Judge Business School. It’s evident that Italy in 2015 had the same market volume of Estonia, a country with just over one million inhabitants, compared to about 64 million Italians.
All Set to Take Off?
But that was two years ago and it is now very encouraging to see that the market seems finally ready to take off and this would be vital taking also in consideration that the total amount of investments in Italian start-ups decreased by 12% in 2017, from 86.2 to 76.6 million.
The development of the alternative finance market would be then even more important to open up access to capital and give private investors the opportunity to sustain and accelerate the growth of the whole start-ups ecosystem.