The European alternative finance market grew 144% last year to €2,957m.
The top markets in mainland Europe by volume of alternative finance are France, Germany, Sweden, the Netherlands and Spain.
In 2014, €201m of early-stage, growth and working capital funding was provided to European SMEs and start-ups through alternative finance platforms.
Seen until recently as a niche activity, online alternative finance, including equity-based crowdfunding and peer-to-peer business lending, has become a vital and increasingly commonplace source of essential funding for SMEs, start-ups and many other businesses throughout Europe, says the report.
The UK is by far the largest European country for alternative finance, at €2.34b (£1.78 b) in 2014, followed by France at €154m, Germany at €140m, Sweden at €107m, the Netherlands at € 78m and Spain at €62m. Alternative finance in Europe excluding the UK grew from €338m in 2013 to €620m in 2014, and has averaged growth of 115% over the past three years. Peer-to-peer consumer lending is the largest market segment at €275m in 2014, followed by reward-based crowdfunding at €120m, peer-to-peer business lending at €93m and equity-based crowdfunding at €83m.
Across Europe, excluding the UK, peer-to-peer business lending grew 272% from 2012 to 2014, followed by reward-based crowdfunding up 127%, equity-based crowdfunding up 116% and peer-to-peer consumer lending up 113%.
The report is produced by the new Centre for Alternative Finance at University of Cambridge Judge Business School and EY. Moving Mainstream: The European Alternative Finance Benchmarking Report is available to download for free at www.jbs.cam.ac.uk/ccaf/movingmainstream.