The equity crowdfunding industry has experienced significant growth in the first quarter of 2023, with both Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) experiencing substantial increases compared to the previous quarter.
According to recent data, Reg CF raised $27.9 million in March 2023, reflecting a slight month-over-month (MoM) decline of 16% compared to February's $31.8 million. Despite this, there has been a 60% increase from December 2022 lows, when only $18.6 million was raised. This resurgence in Reg CF is an encouraging sign for the sector.
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Reg A, on the other hand, has shown remarkable growth, raising $52.7 million in March 2023, the largest amount since April 2022. This represents a significant increase from the $5 million raised in February 2023 and a year-over-year (YoY) growth of 44% compared to $36.6 million in March 2022.
The combined totals for Reg CF and Reg A in March 2023 amounted to $80.6 million, a 119% increase from the previous month's combined total of $36.8 million. Furthermore, there was a YoY increase from $72.3 million to $80.6 million, marking one of the first times in several months that the industry experienced YoY growth.
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On a quarterly basis, equity crowdfunding nearly doubled its total funding from Q4 2022 to Q1 2023. The Q4 2022 data showed Reg CF raising $80 million, Reg A raising $41.6 million, and a combined total of $121.6 million. In contrast, Q1 2023 saw Reg CF raise $80.8 million, Reg A raise $143.5 million, and a combined total of $224.3 million.
Dalmore Group raised a substantial portion of the Reg A funds, coming in at $49.8 million for the month. StartEngine came in second at $2.6 million. For Reg CF data, Wefunder raised the most at $11.1 million. And StartEngine came in second at $10.4 million. Dalmore Group led the pack by total amount raised as a broker-dealer, and StartEngine had the most raised for the equity crowdfunding portals.
This remarkable growth in equity crowdfunding demonstrates strong momentum going into the new year and highlights the increasing role of alternative financing methods for businesses and startups. As investors continue to seek new opportunities and innovative platforms, the equity crowdfunding sector may continue to expand and solidify its position as a viable alternative to traditional fundraising channels.
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