Equity Crowdfunding Sees Explosive 119% Monthly Growth As Industry Picks Up Steam

Both Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) see significant upswings compared to the previous quarter

Equity crowdfunding has seen considerable growth in Q1 2023, with both Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) posting notable gains compared to the prior quarter.

Recent data reveals that Reg CF raised $27.9 million in March 2023, indicating a slight month-over-month (MoM) decrease of 16% compared to February's $31.8 million. However, this figure represents a 60% increase from the December 2022 low of $18.6 million. This rebound in Reg CF is a positive indicator for the industry.

Conversely, Reg A has experienced impressive growth, raising $52.7 million in March 2023, which is the highest amount since April 2022. This significant increase from February 2023's $5 million showcases a year-over-year (YoY) growth of 44%, compared to $36.6 million in March 2022.

The combined total for Reg CF and Reg A in March 2023 reached $80.6 million, a substantial 119% increase from the previous month's combined total of $36.8 million. Additionally, there was a YoY growth from $72.3 million to $80.6 million, signifying one of the first instances of YoY growth in the industry in recent months.

On a quarterly basis, equity crowdfunding has nearly doubled its overall funding from Q4 2022 to Q1 2023. 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 witnessed Reg CF raising $80.8 million, Reg A raising $143.5 million, and a combined total of $224.3 million.

Dalmore Group raised a significant portion of Reg A funds, contributing $49.8 million for the month. StartEngine followed with $2.6 million. In terms of Reg CF, Wefunder led the way with $11.1 million, and StartEngine came in a close second at $10.4 million. Dalmore Group dominated the broker-dealer category by the total amount raised, while StartEngine took the lead among equity crowdfunding portals.

The substantial growth in equity crowdfunding underscores the strong momentum entering the new year and emphasizes the growing importance of alternative financing methods for businesses and startups. As investors continue to explore new opportunities and cutting-edge platforms, the equity crowdfunding sector is poised to expand and further establish itself as a credible alternative to traditional fundraising channels.