International crowdfunding company Indiegogo is launching its iPhone app in Canada on Thursday, the first of what will be a global roll-out of mobile versions of its fundraising technology.
Indiegogo, the largest of the hundreds of global crowdfunders, said Canada was chosen because of the diversity of fundraising campaigns here, and the large amount of feedback it gets from Canadian customers.
After a couple of months of testing in Canada, the app will be made available in the United States and other countries, Indiegogo chief executive officer Slava Rubin said in an interview. By the end of 2014 the app will also be available for Android devices.
“This year we made a commitment to advance in mobile,” Mr. Rubin said, because of the dramatic increase in use of phones for all kinds of transactions. In fact, he said, “if I was launching a new company like Indiegogo today, I would probably do mobile only.”
The new app will take advantage of the location-based features in mobile phones, Mr. Rubin said, as well as the connections in customers’ phone address books.
Canada is Indiegogo’s second largest market, and has seen a 50 per cent increase in the amount of money raised this year compared with last. The company started up in Canada in 2008 and now allows campaigns in French and the use of Canadian dollars on its site.
Crowd funding allows individuals to raise money from the public to fund a project or a startup venture. These can range from video games to computer applications to documentary films to books.
Usually investors don’t get an ownership share in the project, or any kind of dividend. They may get some sort of reward – such as a t-shirt or other prize – although most people make donations without expecting anything in return.
Aside from raising money, crowdfunding also allows entrepreneurs to get feedback on ideas, gain market intelligence, and market products or projects to a wide audience.
The crowdfunding business is thought to generate as much as $5-billion (U.S.) across the globe each year, and that amount is expected to grow dramatically.
A report from Toronto-Dominion Bank earlier this year said crowdfunding could become a crucial source of funding for small Canadian ventures that are currently starved for financial resources.
Proposed new rules in Canada and the United States will allow companies to raise equity in Canada through crowdfunding, although there will be significant restrictions and limitations to prevent fraud.
Mr. Rubin said Indiegogo is interested in expanding into equity funding, but “we are waiting to understand the rules.”