Crowdfunding in China has grown rapidly across various models from 2014 to 2015. Equity crowdfunding regulations were introduced in late 2014, though they primarily allow accredited investors. Reward and donation crowdfunding have been most active, funding business, social causes, and arts projects. The Chinese government aims to encourage entrepreneurship and creative industries through crowdfunding. While still developing, crowdfunding presents opportunities to raise film financing within China and for Chinese-international co-productions. The industry is expected to continue expanding as platforms consolidate and regulations evolve further.

1. FUNDING
E ARTS
TIVE
RIES
& CONOR ROCHE
CROWDFUNDING
IN CHINA

2. GLOBAL GROWTH
RATES BY MODELS IN
2014
- Debt / Lending +223% to $11.08 billion
- Equity +182% to $1.1 billion
- Hybrid-based +290% to $487 million
- Royalty-based +336% to $273 million
- Donation- and Reward +45% and 84% respectively
Source : Masssolution / crowdsourcing.org

3. MOST ACTIVE
CATEGORIES IN 2014
GLOBALLY
- Business & Entrepreneurship 41.3% / $6.7bn
- Social Causes 18.9% / $3.06bn
- Films & Performing Arts 12.13% / $1.97bn
- Real Estate 6.25% / $1.01bn
- Music and Recording Arts 4.54%/ $736m
Source : Masssolution / crowdsourcing.org

4. GROWTH RATES BY
REGION IN 2014
- North America market leader but Asia
topped Europe to become the second
largest region by funding volume
- North America + 145% to $9.46 billion
- Asia + 320% to $3.4 billion
- Europe + 141% to $3.26 billion
- South America, Oceania and Africa + 167%,
59% and 101%, respectively
Source : Masssolution / crowdsourcing.org

5. CROWDFUNDING IN
CHINA
2025 Chinese crowdfunding
industry $50 billion (est.)
50% of the global industry
Source : World Bank, ‘Crowdfunding’s Potential for
the Developing World’ 2013

6. CROWDFUNDING IN
CHINA
- 2011 first reward based platform launched (Demohour)
-2013 78 platforms active
-2014 116 platforms active
Dec Equity Crowdfunding regulations issued
-2015 over 27 ‘Equity Crowdfunding’ platforms

7. REWARD BASED
CROWDFUNDING
PLATFORMS IN CHINA
demohour.com - hardware pre-sales (pivot from
Kickstarter like model in Aug 2014)
dreamore.com - creative projects/Chinese
Kickstarter
tmeng.cn - new media / video content
modian.com - games
musikid.com - music
hi.taobao.com - RMB81.9 million (about US
$12m) for 410 projects in 2014.

8. EQUITY BASED
CROWDFUNDING
PLATFORMS IN CHINA
angelcrunch.com - connects entrepreneurs and
angel investors
yuanshihui.com - the biggest single investment
(RMB 51 million for Xinhua Mobile TV) so far
across all platforms
yulebao - finance product by Alibaba, supporting
specific video contents (film/TV)
baifa youxi - film investment fund for Baidu and
Central Pictures Corporation

9. HYBRID CROWDFUNDING
PLATFORMS IN CHINA
jd.com - start-ups (July 2014 /March 2015), raised more
than RMB280 million
fundator - Asian focus, in English
zhongchou.com
- ex-Googlers & TenCenters
- tech arts / charities
-crowdfunding, financial leasing, loan guarantee, short
term financing, credit management, financial
consulting, assets management, and creative financial
services
-set up an office in San Francisco in early 2014

10. OVERSEAS
CROWDFUNDING
PLATFORMS OPERATING
IN CHINA
Kickstarter / IndieGoGo - US platform
supports creative projects in China
pozible.com - Australian platform, in
Chinese and English
No equity crowdfunding overseas platforms
operating in China

11. ECONOMIC CONTEXT FOR
CROWDFUNDING IN
CHINA
-Encourage entrepreneurialism
-Move to consumption /
creative economy
-Enable growth in the arts and
culture industries

12. CROWDFUNDING IN
CHINA MYTHS
-Culturally China is not suitable for
crowdfunding
-Business is all about personal
relationships ‘guangxi’
-Weak intellectual property protection in
China dissuade people from posting their
ideas online
-Crowdfunding is susceptible to
fraudulent activity
-Chinese are unwilling to give / invest in
intangible products & the arts

13. EQUITY CROWDFUNDING
REGULATIONS IN CHINA
CSRC / SAC issued equity crowdfunding
regulations December 2014
- non-listed shareholding companies may
not exceed 200 shareholders, applies to
crowdfunding
- 3rd party investment fund as a work
around
- accredited investors only

14. ACCREDITED
INVESTOR CRITERIA
-invest at least RMB 1 million in a
single project or
-possess net assets of RMB 10 million
or
-possess financial assets of RMB 3
million and have an annual income of
at least RMB 500,000 for the past 3
years”

15. ‘EQUITY’
CROWDFUNDING
OBSERVATIONS
-Limited access for the ‘crowd’
-Platforms as a front for PE funds
(meng3.com)
-Not automated

16. WHERE THERE ARE
NO OPPORTUNITIES
FOR CROWDFUNDING
IN CHINA
-establishing another national platform

17. WHERE THERE ARE
OPPORTUNITIES FOR
CROWDFUNDING IN
CHINA
-Raising financing for film / video for the
Chinese market
-Chinese government keen to encourage
overseas investment
-Shanghai Free Trade Zone, provides an
opportunity for innovation in financing,
nationally and internationally
-Comparatively low broadband penetration
rate in some provinces

18. WHY EQUITY
CROWDFUNDING FOR
FILM IN CHINA
-30% growth in the film / cinema
industries, set to become the largest
‘film’ market in the world
-more certainty
-co-productions are not subject to the
quota system
-film is glamorous anywhere

19. WHAT’S NEXT FOR
CROWDFUNDING IN
CHINA
-Consolidation
-The ecosystem evolves
-Direct to investor / funders
-Overseas offer
-The market will get bigger

20. THANK YOU
conor@bop.co.uk