Biotechs raise money from the crowd
04.09.2015 - Crowdfinancing has just recently emerged as a financing instrument in the Life Sciences. A new report lists 42 European companies in the sector that have raised a total of almost €23m.
European life science companies are increasingly interested in using crowdfinancing as an additional financing instrument. In Europe, a total of 18 equity-based platforms can be identified as being the most relevant for life science companies. Between 2010 and June 2015, 42 life science companies successfully finished a campaign, bringing the total capital raised through crowdfinancing in Europe to almost €23m. These are the main findings of the “Analysis of Crowd-based Financing in European Life Sciences”, published on the occasion of the “Crowd Dialog Europe 2015” in Helsinki by German market analyst BIOCOM AG.
A survey among the readers of European Biotechnology Magazine also reveals that the life science community is optimistic with respect to the future of crowdfinancing. 50% of the people say that crowdfinancing will become a relevant financing instrument for the life sciences, a further 28% think it is not yet the right time.
“With respect to the high capital demand in the life sciences, it was only a question of time before firms jumped on the bandwagon of crowdfinancing”, says Sandra Wirsching, researcher at Berlin-based BIOCOM AG. According to the analysis, the last two years in particular have seen a specific dynamic. In 2014, the number of life science related crowdfinancing campaigns on the 18 analysed platforms increased to 18, twice as many as in 2013. By June 2015 alone, a total of 13 European life science companies had already opted for this alternative financing instrument.
As demonstrated within the analysis, the average amount per life science campaign was about €550,000. Ten biotech and medtech companies succeeded in raising around €1m or more in capital. Moreover, in 2014 and 2015, a new trend in the European crowdfinancing market emerged: the specialisation of platforms towards life sciences. According to the report, there are four European platforms with a health or life science focus.
In its conclusion, the report underlines high dynamics and a growing professionalism, which has been observed in the crowdfinancing market in recent years. “Platform operators more often cooperate with professional investors and VC capitalists, making also higher amounts of capital available for the firms”, Wirsching concludes. In addition, the legal background in most of the European countries has also improved. Here, the report includes an overview by legal experts from Dentons Europe, outlining the main characteristics of the legal environment in the most important European countries and in the US.
More information is available here: www.biocom.de/en/crowdfinancing2015http://www.european-biotechnology-news.com/news/news/2015-04/biotechs-raise-money-from-the-crowd.html