France is the European state with the More developed and mature crowdfunding market. It has achieved significant collection volumes and a really significant spread of this financing model for businesses.

This maturity is also reflected in the fact that French platforms have been the quickest to adapt to the ECSP Regulations and to apply for authorization to operate throughout the European Union.

Beyond the rhythm, the development dynamics of the french crowdfunding are those common to many European countries: from early reward and donation crowdfunding to the rise to success of lending crowdfunding, with rapid dominance of real estate, and equity crowdfunding slowly but steadily making its way.

In this article, we tell the crowdfunding in France from its origins to the present, analyzing numbers, actors and trends.

A little history: the origins of crowdfunding in France

The first crowdfunding experiments manifested in France as early as the first half of the 2000s particularly in the cultural sector, which typically is one of the most active and early in seeking alternative funding sources.

One of the first significant platforms, in fact, was MyMajorCompany, founded in 2007 as a "participatory label," allowing users to fund young artists in exchange for sharing in the profits from music sales.

In the years immediately following, the first reward and donation platforms, such as KissBankBank and Ulule, which are still active today.

A turning point in terms of visibility and awareness for French crowdfunding was, in 2012, the publication of the "manifesto in support of crowdfunding" by the then-existing platforms, uniting for an information conference designed to engage the general public and establish a common deontology. 

This and other initiatives also aimed to attract government attention. In terms of legislation, France followed closely behind Italy: In 2013, the French government began to consider crowdfunding as a phenomenon that should be regulated and in 2014 issued Ordinance No. 2014-559 regarding the financement participatif. This rule established two categories of operators:

• CIP (Conseiller en Investissements Participatifs): platforms that offer securities such as common stock or fixed-rate bonds (equity and lending crowdfunding in the form of bonds).
• IFP (Intermédiaire en Financement Participatif): reward and donation crowdfunding and lending crowdfunding platforms as direct peer-to-peer lending).

All platforms had to apply for registration in one or the other category in order to operate. The alternative was to fall under the broader category of PSI (Prestataire de Services d'Investissement), for platforms that offered broader investment services, with more stringent requirements and stricter regulation. 

In addition, a limit was established on fundraising and investors for securities offerings without a prospectus, which had to meet certain requirements.

After regulation in 2014, the industry is gaining momentum: platforms specializing in equity and lending crowdfunding are increasing the number of campaigns and capital raised. 

Also in France, later, as in Italy, crowdfunding platforms were allowed to place Minibonds, and the collection limit for each type of campaign was raised to 8 million euros per year.

The introduction of the European Regulation for Crowdfunding Service Providers supplants much of the French national regulation, and today all platforms fall under the single category PSFP (Prestataire de Services de Financement Participatif).

The size of the crowdfunding market in France

The participatory financing market in France has grown exponentially over the past decade. 

Collection volume increased from about 165 million euros in 2015 to about 2 billion of 2023 (latest data from the Barométres du crowdfunding of the Financement Participatif France association).

Like Italy, however, France has seen a decline in the volume of capital raised for the first time in recent years. 

Responsibility is attributed to the context of macroeconomic and geopolitical turmoil and the French housing market crisis. The latter has particular weight since real estate is the main asset class of transalpine crowdfunding-as it is for Italy.

In contrast, however, the number of successfully closed campaigns has continued to increase, reaching about 160,000 per year. The crowdfunding tool, then, remains popular in France, but with a Lower mobilization of capital toward a larger number of projects.

Finally, while the real estate sector is losing ground, another is gaining: the renewable energy sector, on the strength of its current centrality and government incentives.

Equity and lending crowdfunding in France

In France the lending crowdfunding (divided into remunerated loans and bonds) has historically represented the largest slice of the market in terms of capital raised. Its importance has further increased with the rise of real estate crowdfunding: in 2022, the sector will real estate alone contributed about 68% of the total collection. We are talking about more than 1.5 billion in collection value.

The current crisis has led to the closure, at least temporarily, of some of the leading platforms in the segment, such as October, motivated by the economic environment.

The segment equity - remained modest until 2019-it has grown rapidly in recent years, reaching 265 million euros in 2023. This growth is also due to incentives such as the 25% tax deduction for investments in innovative SMEs, which have stimulated the inflow of venture capital from small investors even at a time of general crisis.

Bidders and investors

Investors participating in crowdfunding campaigns in France are for the vast majority private retail individuals. According to the 2023 data, about 72% of the lenders are classifiable as "non-professional" or unsophisticated (under EU regulations), while only 28% are among the "avertis" investors or sophisticated.

The approximately 3 million French people who participate in crowdfunding campaigns each year have an average age of 45-47.

The average amount invested fits between 5 and 10,000 euros in lending crowdfunding and is around 6,000 euros in equity.

In lending crowdfunding, the individual investor often diversifies capital across multiple campaigns, whereas in equity they tend to concentrate resources on one, at most two (a phenomenon we have discussed often before: investment in equity crowdfunding is targeted and motivated by an investor-firm relationship that originates before the user lands on the online campaign page).

A phenomenon that is being observed in several countries is also occurring in France: a progressive Opening crowdfunding to institutional investors such as investment funds and financial advisors, who are showing increasing interest in this channel for financing innovative and high-potential projects. Some platforms are seizing on this trend and changing their model accordingly: for example, combining funds from individuals and institutional investors to finance business loans.

Finally, it should be noted that according to FPF data, in France the investor pool is divided almost equally between men and women: 53.6% are men, 46.4% are women. Recall that in Italy only 18% of crowd investors are women, but the figure is growing steadily.

Regarding the sketch of bidding companies, in France, unlike in Italy, SMEs outperform startups By three times.

The most active sectors

We have already mentioned that the real estate has established itself as a driving force in French crowdfunding, particularly with the residential construction sector.

Similarly, we have already mentioned that another area of strong growth is the renewable energy. Many specialized platforms in the field have sprung up, leveraging the idea of enabling communities to finance ecological transition projects closely linked to their local area.

Other sectors particularly present in crowdfunding in France are technology, health, tourism, trade and services, and agribusiness.

French crowdfunding platforms

In France they operate to date about 70 crowdfunding platforms authorized, united in the trade association Financement Participatif France.

Some of the major operators:

• WiSEED, equity crowdfunding
• Lendosphere, lending crowdfunding green
• Fundimmo, real estate crowdfunding
• Ulule, reward crowdfunding, which acquired KissKissBankBank and is also active in Italy.

Emerging trends in French crowdfunding

• Shift toward areas of environmental sustainability
• Rebalancing between different types of crowdfunding
• Entry of foreign platforms through the EU passport (already in 2023 15 platforms and 124 projects)
• Overseas operations of French platforms
• Internal consolidation with mergers and acquisitions between operators 
• Interest in the asset tokenization And first pilot initiatives in this regard
• Partnerships between crowdfunding actors and traditional finance
• Creation of exchange bulletin boards as a secondary market.

We can see that the emerging trends in French crowdfunding are similar to those we expect for the Italian market: it is indicative of the prospect of An increasingly European crowdfunding market..