The merger between Financement Participatif France (FPF) and France FinTech earlier this summer marks a pivotal moment for the crowdfunding sector in France, raising questions about its future identity, influence, and sustainability. While some see this as a positive step towards integrating crowdfunding into the broader financial ecosystem, others may view it as a potential threat to the sector’s autonomy. These concerns are not limited to France, as similar dynamics are unfolding across Europe, shaping the future of crowdfunding on the continent.
Crowdfunding’s Loss of Autonomy and Influence
For years, FPF has been the primary voice advocating for the crowdfunding sector in France, successfully shaping key regulations that defined the industry like no other national crowdfunding association in Europe. One might say, FPF has been the most relevant national crowdfunding association over the past decade in all of Europe. However, by merging with France FinTech, which represents a vast array of financial technology companies, crowdfunding could lose its distinct voice.
In an organization that includes major players in fintech, crowdfunding platforms may struggle to maintain visibility and influence. Their specific needs and challenges could be overshadowed by the priorities of larger, more resource-rich fintech sectors like digital banking or asset management. While we hope that this will not be the case, this concern is not totally unfounded, but a trend we have witnessed in other European countries.
Constraints and Marginalization
The merger could therefore lead to diluted advocacy efforts for crowdfunding. FPF’s focus on crowdfunding allowed it to advocate specifically for the needs and interests of this niche sector. A significant concern is the financial disparity between crowdfunding platforms and larger fintech firms. Within France FinTech, budgetary contributions from crowdfunding platforms are likely to be dwarfed by those from big players in the fintech space. This financial imbalance could result in crowdfunding interests being sidelined when it comes to setting the association’s agenda or allocating resources.
As a result, the distinct challenges of crowdfunding may receive less attention. This dilution of focus could hinder the development of new regulations or adaptations needed to keep up with the evolving crowdfunding landscape. The sector may find itself with limited influence in shaping policies that affect its future. Yet, we are under no illusion that the financial sustainability has been a key driver in the decision-making process on behalf of FPF itself.
Moreover, the broader fintech community may not fully understand or prioritize the unique aspects of crowdfunding, such as its community-driven nature, the importance of maintaining trust with small investors, and the need for tailored regulatory frameworks. As a result, the sector may struggle to adapt to new challenges or capitalize on emerging opportunities. The one aspect that gives hope, the core and long-term staff of FPF moved into France FinTech, bringing their personal and unique experience with them.
The European Context: Diverging Trends
Across Europe, the crowdfunding sector is at a crossroads. In some countries, the introduction of ECSPR has already led to the marginalization of professional crowdfunding, not least in Germany where only 4 ECSPR licenses are being held according to ESMA. But this is also true for trade associations, the few that existed, where in some other countries the consolidation of fintech and crowdfunding interests resulted in a diminished focus on the specific needs of crowdfunding platforms, leading to their gradual decline in influence. In other countries, the cost of managing a trade association has created limits to the impact such organisations can achieve, while in other countries individuals behind the associations may have become key hurdles themselves. FPF is not a unique case as such, nor the first, but its political significance to the French, and European crowdfunding market, is unparalleled.
When EUROCROWD reached out to national associations in late 2023 for an open discussion, there was limited interest in exploring such ideas mainly due to financial constraints. These financial constraints played also a role in FPFs decision to seek a new home within France Fintech—and let’s not forget that FPF was by far the largest national crowdfunding association in Europe. These trends reflect a broader challenge across Europe: the difficulty of maintaining a distinct voice for crowdfunding within larger, more diverse financial markets and larger, less specialised trade associations. As fintech continues to grow and evolve, crowdfunding risks being seen as a niche segment, rather than a vital component of the financial services ecosystem. This could result in reduced advocacy, fewer tailored regulatory frameworks, and ultimately, a slower pace of innovation within the sector. We remember vividly the discussions in our boardroom back in 2015 about renaming us into Fintech or Digital Finance something or the other. We decided to buck the trend and keep focused, but we too understand the operational and financial constraints this has brought along.
The future of crowdfunding in Europe is likely to be shaped by a combination of regulatory developments, industry consolidation, and the actions of a few key organisations. However, the trends seen in France and other countries suggest that the sector could face increasing marginalization if it is not given the distinct representation it needs within larger financial ecosystems. To avoid this, it will be crucial for the crowdfunding sector to maintain a strong, unified voice at both the national and European levels. This includes not only engaging with policymakers to ensure supportive regulations but also working to educate the broader fintech community about the unique value and needs of the crowdfunding sector.
Conclusion: A Critical Juncture for Crowdfunding in Europe
The merger of FPF with France FinTech is a microcosm of a broader trend across Europe, where the crowdfunding sector is at risk of losing its distinct identity and influence. While this consolidation may offer some benefits in terms of resources and integration, it also poses significant risks, particularly if the specific needs of crowdfunding platforms are overshadowed by the priorities of larger fintech players.
This could ultimately lead to a decline in the sector’s development and influence, mirroring the experiences seen in other countries. For crowdfunding in France, this merger might represent not just a new chapter, but a turning point—one that could either lead to greater integration and growth or signal the beginning of its decline within the broader fintech landscape. The choice is that of crowdfunding service providers.
Our own role, at EUROCROWD, is therefore also up for discussion. We potentially should embrace this as an opportunity to be more active than ever in ensuring that crowdfunding remains a vibrant and innovative part of the European financial landscape. By continuing to advocate for the sector at the EU level and providing a platform for collaboration, EUROCROWD could seek to help mitigate the risks of marginalization and ensure that crowdfunding continues to thrive across Europe.
As the leading voice for crowdfunding at the European level, EUROCROWD has played a crucial role in advocating for the sector’s unique needs and ensuring that it remains on the EU’s policy agenda. Unlike national associations that may be absorbed into broader fintech organizations, EUROCROWD has, for now, remained focused solely on crowdfunding, providing a platform for the sector to collaborate, share best practices, and advocate for supportive regulatory frameworks. However, unlike all national associations, we have so far also remained independent from our members’ financial contributions and influence—avoiding a sell-out to the next best Fintech association.
Our work is particularly important in the context of the EU’s European Crowdfunding Service Providers Regulation (ECSPR), which aims to create a harmonized regulatory environment for crowdfunding across Europe. This regulation presents both opportunities and challenges for the sector, and advocacy will be essential in ensuring that the regulation is implemented in a way that supports the growth and sustainability of crowdfunding platforms. Our work within this, however, is not a given but a result of the overall crowdfunding sector’s commitment.
