While crowdfunding has existed in one form or another for well over a decade, the emergence of an equity-based model has truly helped it to remain relevant in the modern age.
As recently as 2018, for example, equity-crowdfunding portals raised around $34.4 billion, which was more than 12-times the total generated just three years previous. In total, the sector is expected to grow to over $300 billion by the end of 2025, and some experts consider this to be a conservative estimate.
Crowdfunding has also enabled businesses to empower customer investment, driving greater loyalty and brand interaction in the process. In this post, we’ll ask how crowdfunding continues to drive business success in 2021.
How is Parcel2Go Leveraging Crowdfunding to Drive Their Business?
Parcel2Go is one of the latest brands to embrace crowdfunding’s full potential, with a large-scale program designed to drive investment and empower customer involvement.
A price comparison site based in Bolton allows customers to compare quotes from 20 courier services (before organising individual collections). The firm has kick-started a campaign with a fund-raising target of £500,000. It has also taken the innovative step of offering 450,000 of its customers the first chance to invest in the business through the initiative, using the popular Crowdcube resource as its core platform.
The investment will then be opened up to the wider public, but the brand hopes that customers will have pledged a large stake by the time others choose to get involved.
What Can We Learn from this?
The decision to embrace crowdfunding represents a logical one for the brand, as it reflects the demand for company shares and offers a relevant avenue for future growth.
After all, the businesses have recorded huge growth during the last decade, with total revenue has increased from £5 million in 2007 to an impressive £56 million at the end of last year. Having also carved a lucrative niche among eBay and Amazon sellers looking to reduce the cost of shipping parcels both domestically and overseas, Parcel2Go was also keen to tap into its loyal consumer base and create an even deeper level of engagement while raising funds.
From a commercial perspective, there are several lessons that businesses can learn from this. Firstly, there’s a great deal to be said for leveraging crowdfunding to seek investment from loyal patrons, as these individuals have already invested in your services and remain heavily engaged with the brand. In this respect, empowering them as investors affords them a stake in your brand’s future development, which only helps to fortify existing relationships and create entry points into new ones.
Not only this, but the notion of offering customers the chance to invest through crowdfunding has also generated positive publicity for the Parcel2Go brand, reinforcing a progressive identity that is in touch with the needs and demands of its customers.
The Last Word
Above all else, this underlines the undeniable fact that crowdfunding remains a viable funding vehicle for small and established businesses, particularly those looking to embrace new investors from diverse backgrounds.
This is surely a trend that will continue unabated in the years to come, as crowdfunding continues to thrive as a lucrative growth market.
The same principle can be applied to nonprofit organisations, too, particularly in an age where we’re all more interconnected than ever before.