Kickstarter, which allows smaller investors to back projects in exchange for rewards, is to open up to UK users later in 2012.
While Kickstarter says that it does not support businesses, rather projects with a ‘clear goal’, it provides a way for early ventures to get off the ground.
The announcement comes a week after Seedrs, a crowdfunding service aimed at helping investors and entrepreneurs, launched in the UK.
Seedrs claims that it is the only crowdfunding platform in the world to have gained authorisation from the Financial Services Authority.
In a UK market which already includes equity-based platforms such as Crowdcube and Seedrs, and debt-based services such as Funding Circle and ThinCats, Kickstarter will provide a way for interested parties to make investments.
James Meekings, CMO and co-founder of Funding Circle, comments, ‘Entrepreneurs, especially those in the creative industries, have found it challenging to raise the finance needed to get projects off the ground.
‘The pedigree for success often falls outside the risk models of traditional bank lending, and mostly requires entrepreneurs to take out personal loans. This means many projects never get off the ground and so it will be great to see Kickstarter helping to make these dreams a reality as it has done so successfully in the US.’
In its current guise, Kickstarter requires prospective projects to chose a deadline and goal minimum to raise funds. If the mark is not met in the set time then no funds are collected.
Kickstarter makes its money by taking a 5 per cent cut of the funds raised, with Amazon taking an additional 3-5 per cent.
The news was released via Kickstarter’s twitter page, with the tweet reading, ‘People in the UK will be able to launch projects on Kickstarter starting this autumn.
Previously Kickstarter has only been available for those with a US bank account due to the platform utilising Amazon Payments.
Luke Lang, co-founder of British equity crowdfunding site Crowdcube comments, ‘It’s positive for the crowdfunding market to have another key player making noise about the benefits crowdfunding.
‘Kickstarter’s ‘benefits for donations’ based crowdfunding model is different to Crowdcube’s since we give investors actual shares in all types of businesses. However, another big crowdfunding player in the UK market further validates the importance and relevance of crowdfunding today for any small or even larger business seeking finance without having to lose control of their business.’
To date Kickstarter has funded 20,017 projects, with the most successful to date being the $10.3 million (£6.6 million) raised by Pebble – an e-paper watch for iPhone and Android devices.
So far, 181 projects have raised between $100,000 and $1 million, with seven netting over $1 million.