The research carried out with the universities of Cambridge and Berkeley, California, found that £939m worth of alternative finance, including crowdfunding, P2P lending and invoice finance, has been raised this year.
Off this, £332m was raised for seed and working capital by startups and SMEs.
Dr Richard Swart, one of the project’s researchers, said: “With the cooperation of alternative finance intermediaries, the UK is leading the way in creating comprehensive and valuable data on this important new area of finance.”
Equity-based crowdfunding has exploded by a massive 618 per cent year-on-year, whilst P2P lending has grown by 211 per cent in the same period.
Julia Groves, chair of the UK Crowdfunding Association, said: “The data proves that our sector is increasingly moving from “alternative finance” to mainstream “modern finance”. Crowdfunding is already providing real value in the provision of desperately needed capital in the engine room of the UK economy.
“With growing awareness and the advent of a new regulatory framework early next year the future looks extremely bright and the sector is primed to go on and completely replace aspects of retail banking”.
The researchers expect alternative finance to be worth £1.6bn in 2014.
This news comes ahead of the end of the Financial Conduct Authority’s consultation on crowdfunding, which closes next Thursday.
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