Canadian Crowdfunding Platform Landscape

Canada has recently emerged as one of the global leaders for crowdfunding, and as such, a combined 36 platforms have been launched across Canada. Due to provincial regulations, this growth has been limited primarily to donation and rewards based models.

In order to better understand how the industry is unfolding in Canada, let’s examine the different Canadian crowdfunding platforms and their impacts.  

Over $93 million raised, averaging over $1,750 per successful campaign

An impressive $93 million has been raised in Canada. The majority has been provided for donation based purposes, although the reward model has surged in popularity in recent years. The average amount raised for a successful campaign is relatively low. Many Canadian-based campaign owners tend to choose non-Canadian based platforms despite the high potential to raise a large amount of funds on home soil. For instance, the very patriotic fundraiser for Warrant Officer Patrice Vincent and Corporal Nathan Cirillo that took place in 2014 utilized the U.S.-based platform Indiegogo. $394,000 was raised, an incredibly large campaign relative to Canadian platform standards.

Canadian platforms represent an estimated 6% of platforms worldwide and an even smaller fraction in terms of global money raised, coming it at approximately 1%.

The Canadian landscape is currently dominated by two powerhouses, FundRazr and Chimp, which account for roughly 87% of the total funds raised on the Canadian landscape. The other players are characterized as follows:

• Four platforms that raised over $1 million;
• 15 platforms that raised between $100,000 and $1 million;
• 15 platforms that raised less than $100,000.

British Columbia is currently the best breeding ground for platforms

British Columbia

Platforms from B.C. account for over 90% of Canadian funds raised, attributed primarily to RundRazr and Chimp, but also Picatic.

Ontario and Quebec

Together these provinces boast a total of 13 successful platforms, but are typically smaller and more diverse, with funds raised ranging from $100,000 and $1.7 million. The most utilized Ontario platforms are FlipGive, followed by Smallchangefund, Cookiee Jar, Giveffect, FWYC, GreedyGiver and My Class Needs. The best known Quebec platforms are YoloMolo, MAKEACHAMP, LaRucheQuebec and Haricot.

Alberta, Nova Scotia & the others
Alberta is led by Uend, followed by Invest in YYC and Alberta Booster. Pursuit takes the lion's share in terms of funds raised in Nova Scotia, with negligible funds currently raised in other provinces.

Charity / non-profit campaigns raise the most on Canadian platforms

General purpose platforms account for $52.5 million in Canadian funds raised; however, FundRazr claims 99% of this figure. Although categorized as general purpose, the majority of FundRazr campaigns are geared towards charitable causes.

Charities and non-profits have raised over $35.4 million across multiple platforms, and this success can primarily be credited to Chimp, although other major players include Yolomolo, Flipgive, Uend, Cookiee Jar, Climb for Change, and Giveffect.

Artists and event organizers have embraced the niche Canadian platforms that tailor their services to such a demographic, and have raised over $1.5 million, mainly from Picatic, FWYC and InvestYYC.

Athletes prefer more the targeted platforms of MAKEACHAMP and Pursuit, despite the higher base fees ranging from 10%-15% of total funds raised, not including transaction fees.

Local platforms target a very specific geographical area, and have garnered interest and close to $1 million in raised funds, from Smallchangefund (Ontario), La Ruche (Quebec) and Alberta Booster (Alberta).

Education has found a small niche for platforms, raising approximately $420,000 through My Class Needs (primary & secondary school fundraiser), Seeds of Change (McGill University), FutureFunder (Carleton University), and Equals6 (student scholarships).

It should be noted that there are currently no platforms that specifically target raising money for businesses, nor have there been many business oriented campaigns launched on Canadian platforms.

Final thoughts

The Canadian platform is a budding industry. Despite the fact that many successful platforms have simultaneously surfaced and that the average crowdfunding amount per successful campaign is relatively low, a significant amount of total funds have been raised, which is a strong indicator that this industry is full of promise and can be sustainable long-term.

Canada has a great deal to be proud of; however, platforms still dwarf in comparison to the major players from the US, which have shown to be more diverse in terms of vertical markets. The rationale for the success of the U.S. platforms includes greater backing from investors including venture capitalists, which in part results into more user-friendly, professional looking websites.

If Canadian platforms are unable to quickly grow to a larger mass, they run the risk of forever being relegated to niche markets, typical of other Canadian firms in global economy. It should be noted that niche markets can still achieve ample success. For instance, sports are close to Canadian hearts, given that there is a feeling of pride linked to the achievements of nation-wide athletes. Campaign donors may be more attracted to specific platforms that have an associated local, regional, or national focus. As such, Canadian based MAKEACHAMP and Pursuit have both achieved success following this notion.

To conclude, more growth for Canadian platforms is expected, although the future positioning of the platforms still remains uncertain.