On May 10th, French startup Particeep was awarded the Future FinTech Star Award during ICT Spring which brought together 600 seasoned professionals from all over the World. Our team met with its CEO and founder, Steve Fogue, to discuss innovation on the FinTech sector and especially the rise of crowfunding.
How did you come up with the idea of Particeep? To what problematic does Particeep answer?
We noted 3 conclusions. First, by 2020, more than 1,000 billion of financial flows will be related to online project funding according to Forbes. Over 50% of financial product subscriptions will be online according to BNP Paribas, and players in the financial industry have all begun their digital transformation.
Financial players, now more than ever, need a turnkey technology adapted to their working methods, allowing them to operate online quickly, to collect, analyze and transform information collected online into business opportunities. Particeep has emerged to meet these needs.
Particeep is the first French SaaS solution available in white label that dematerializes the management of online funding operations. With its customizable and modular technology, any organization can now create their own financial product distribution platform or crowdfunding platform.
Particeep helps firms, banks and asset management companies worldwide to operate their digital transition quickly, with agility and at a lower cost, while maintaining their existing information system.
How did the crowdfunding industry evolve in the last years? What will be the next trends to keep an eye on?
The crowdfunding market shows 3 digit growth worldwide for several years; the number of crowdfunders keeps growing. In 2016, the industry will represent more than $ 30bn in funds collected online, a figure higher than VC investment over 1 year.
The US and UK markets remain the most mature, the most active and we note that crowdlending retains its catalytic position in this market representing over 75% of funded projects.
It is worth noting 3 key trends for the crowdfunding industry in the coming years:
· The democratization of equity crowdfunding with the JOBS ACT which allows non-accredited investors to invest in venture capital
· The influx of institutionals on the crowdfunding market. Transparency, simplified online access to opportunities and qualified information facilitates the apprehension of private equity or private debt crowdfunding as a portfolio diversification source
· The impact of Blockchain technology for more funding disintermediation and to bring a solution to the liquidity risk and lack of trust related to online transactions
How does Particeep differentiate itself from its competitors? What’s your competitive advantage?
We differentiate ourselves in several ways. We have created a full-stack solution, that is to say that we dematerialize the entire value chain of funding operations, namely sourcing, risk assessment, distribution, management of financial flows, risk monitoring post-financing and even the exit given that the operations are subject to liquidity risk.
We offer the market a fully modular and customizable technology. It can be adapted according to the geographical area, currency, regulation and financial asset class of the activity of our client. The platform is created online by its paperless needs and it is operational immediately.
Finally the technology we offer is integrable and connected through our API (application programming interface). All financial actors wishing to digitize their funding activity can therefore build the platform according to their specifications and connect third party services of their choice and integrate our technology to their information system as an add-on
Our customers can easily move from a ready to use platform enabling them to test their online solution to a fully integrated technology which is perfectly calibrated for their online business.
How complicated it is, in 2016, to create and finance a startup?
I would talk about creating a startup in the FinTech sector; the parallel can be drawn for other sectors. The finance sector has begun its digital transformation. Several business operations are the perfect use cases for FinTech, so there is still room for disruptive players in the market.
Furthermore it is always interesting to introduce competition where there are monopolies…Without competition there is no progress…
In terms of funding, this greatly depends on the country and the willingness of governments to stimulate innovation and entrepreneurship.
In France, even though we have a funding gap (the famous equity gap) preventing several innovative projects to be born, legislation advocates for the development of alternative financing such as crowdfunding. Entrepreneurs have multiple funding systems, namely unsecured loans, seed loans, repayable cash advances carried out by public and parapublic agencies.
In the UK, the situation is different, tax incentives are strong to push private investors to fund promising projects through the SEIS program (Seed Enterprise Investment Scheme) eg offering them a tax reduction of up to 50%.
Could you share 3 pieces of advice for entrepreneurs who wish to create their own company?
First, test your idea, your product/service with identified prospects as quickly as you can. This is the best market research there is and it is free! You also have to find your first customer case that validates the project, and finally, get support, pieces of advice and/or create a team.