2020 Barometer of equity and equity-like financing
A word from Florence Vasilescu, CEO of FirmFunding
"Trends in equity and equity-like financing in 2020: Impact of the Covid crisis... and after?
As last year, we have decided to publish a private debt barometer, which allows to know the trends of capital debt for 2020, an atypical year in many ways. What can we take away from it, in terms of trends?
First of all, a drop of almost a third in the number of financings, a direct impact of the Covid crisis:
- the financing could not be advanced / materialize during the containment periods (3 months in total)
- some SMEs have taken advantage of an EMP as a priority and have postponed their need for equity financing to a later date.
Investors were nevertheless present and the equity financing market remained dynamic: 22 applications were put online, for a total amount of €110 million.
- The beneficiary sectors are as varied as ever, with a predominance of real estate and industry (50% of cases), and, for the first time, a significant proportion of "impact" projects (30%), no doubt the result of a welcome underlying trend in investors' expectations.
- The size of beneficiary SMEs is on the rise (55% have a turnover>20M€ against 32% in 2019), which is hardly surprising in a context of crisis.
- Interesting developments in terms of geographical sector: the majority of beneficiary SMEs are no longer located in the Ile de France region (23% in 2020 compared to 56% in 2019), and there is a significant number of financings of companies located outside France (18% in 2020 compared to 3% in 2019), in Belgium, Luxembourg and Spain.
- With regard to the typologies of financing, there is a decline in equity/OC in favor of mezzanine, to finance the vast majority of the development, with the interesting emergence, in 2020, of refinancing projects.
What is the trend for 2021? More than ever before, SMEs will need to rebuild their equity capital, and the outlook for equity financing is positive and should help the recovery.
FirmFunding will be there to support them: Let's finance companies differently!"
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