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Crowdfunding - raising small amounts of money through various lenders - as a concept is not new. While books have been crowdfunded for centuries, war bonds too were theoretically a form of crowdfunding military conflicts. But the concept on the internet first gained popularity when in 1997, fans raised $60,000 for British rock band Marillion's US tour. Cut to the present. In India, crowdfunding via the internet has been around since a decade but has gathered pace only in the past five years. The penetration of the internet and the popularity of smartphones has stirred a lot of action in the segment. Globally, there are broadly four types of crowdfunding that's accepted: P2P (peer to peer lending), reward crowdfunding, equity crowdfunding and donation crowdfunding. Of this equity crowdfunding, though still largely unexplored, has a lot of potentials. With equity crowdfunding, companies sell securities, whether in the form of equity in the company, debt, revenue share, convertible note, and more. Investors in equity crowdfunding stand to make a profit if they make a good investment and the company they invested in grows. While crowdfunding by Indian start-ups is not allowed, Indian investors can invest in start-ups and early-stage businesses on foreign platforms such as Republic.co, Seedinvest, Wefunder, AngelList, EquityNet, CircleUp, etc. in the US and Crowdcube, Syndicate Room and Crowdfunder in the UK. This form of asset class involves high risk but also promises good returns without requiring heavy investment. A little due diligence on the investor's part to assess the authenticity of the entrepreneur and the project can help them reap huge benefits. Interestingly, Manshu Agarwal, CEO, Ponder, believes India is a good market for equity crowdfunding. "Once the market and the regulatory landscape develops, equity crowdfunding can work well in India as people are looking for ownership in entities that excite them. The stock market has created a lot of new wealth, and equity crowdfunding can spread this through another asset class." As for building investor confidence, being fully legally compliant is the way to go, he said. Currently standing at an estimated `300 crore, the sector has huge growth potential, believes Vinay Mathews of Faircent, a P2P lending platform. "Since we started five years back, we have seen 20-25 % growth, both in terms of borrowers and lenders. Riding on the shared economy wave, this sector has the potential to see 100-200% growth in years to come." The platform attracts borrowers with requirement as low as `50 and does several checks and balances to ensure their authenticity. Over the past few years, P2P and donation-based lending has really caught up. Milaap, one of the most prominent donation-based crowdfunding platforms that entered the space eight years back is a case in point. "India's private healthcare spending is estimated at $90 billion a year. Of this, about $60 billion is out-of-pocket: From savings, borrowing or support from friends and family. Crowdfunding can be a great debt-free way to meet urgent medical needs," says Anoj Viswanathan, President and Co-founder, Milaap. The platform that sees a huge influx ofborrowers in need of urgent medical aid everyday, raised 1.2 crore for Kerala flood victims last year. As is the norm these days, being women-centric has its own advantage. Desiredwings, a reward-based, women-only crowdfunding the platform helps women entrepreneurs raise money for their projects. Apart from helping women raise money, the platform also provides them access to renowned influencers, big investors and mentors besides keeping them apprised about various government announcements and schemes. "We don't really allow people to invest directly through the platform, but our Investor Zone function allows them to contribute and behave like a backer and monitor the entrepreneur and the project closely," said Shabir Momin, Co-founder, Desiredwings. The platform claims that investors have gained anything between 5-30 times RoI (return on investment) through it. For the borrower, the advantage is that the backers pay for the service or product in advance, which helps them significantly in managing cash flow. The future looks bright for the segment but there are some challenges too. Some promising start-ups are picked up by the angel investors at an early stage and don't reach the crowdfunding platforms. "Plus, the absence of a standardized process for rating investment opportunities makes it difficult for an investor to evaluate a project," says Gayathri Parthasarathy, National Head - Financial Services, KPMG in India. However, with Sebi working on a regulatory framework for crowdfunding, things may look up for the sector, she said. A regulatory framework would be a boon for the investor as it will mitigate the risk of fraud and ensure due diligence and immediate transactions reporting. As of now, the crowdfunding industry seems to be on the right path but whether it attains the glory it deserves, only time will tell.
When it comes to marriage, Indian families have traditionally relied on the referrals route. The family's elders would fan out into their social network - the 'real' version, not digital - and, if required, enlist the services of a matchmaker to hit upon the right match based on the references of others who were considered reliable. This, of course, was considered a private and safe method but had its downsides as well - in terms of limited choice and control being in the hands of others. The online matchmaking revolution changed that to a large extent, so much so that India today is considered one of the fastest growing markets for online dating and matchmaking applications worldwide. It is, therefore, probably apt that in online, too, we are coming back to referrals as a preferred route for matchmaking as well as dating. The online matchmaking industry in India is now almost two decades old, and one big benefit it has brought is exponentially increasing the choices available to those seeking partners. Plus, the prospective groom or bride has much greater control over the final choice and outcome. The doors for online matchmaking opened in the country in 2001, with the launch of bharatmatrimony.com. Today, the platform boasts several regional language-based domains and an app, which is more of a private messenger for people listed on the website. Soon, portals like shaadi.com, jeevansathi.com, simplymarry.com, among others, followed suit and took online matchmaking to a different level. According to a Ken Research Report of 2016, India's online matchmaking industry revenues are set to touch $318 million by 2020. Jeevansathi.com, one of the biggest players in the segment, believes that growing internet penetration in Tier II and Tier III cities is good news for the sector, among other factors. "Education and financial independence of women is playing a big role in driving them to find a partner on their own," says a Jeevansathi spokesperson. "Finding a partner via the web route gives them an easier setting to objectively evaluate matches." The next stage of this evolution was brought in by the mobile phone, especially the smartphone, which not only made marriage-matching searches handier but also transformed the practice of dating. Dating apps such as Tinder and others boosted dating by making it more convenient and private. Tinder, the world's leading social app to meet new people, launched in India in 2016, and youngsters, particularly in the age group of 18-21, lapped it up. Soon, the space was flooded with names such as TrulyMadly, Woo, Okcupid, Azar, Badoo, Floh and very recently Bumble. And the spurt in the smartphone user base - estimated to touch 450 million users by 2020 - only fuelled the segment's growth. The pattern in using the apps may differ as per age groups but there has certainly been a steady increase in their user base. While most 18-21-year-olds get on an app just to make friends - particularly when moving to a new city to study or to work - those belonging to the 26+ age group are on the lookout for more serious relationships. However, the biggest pitfalls of online dating - whether through a PC or a mobile app - were security and safety, with many women being harassed on online dating sites/apps. Not surprisingly, the gender ratio is highly skewed in favour of males when it comes to online dating. A survey by Woo puts the ratio of male: female users of dating apps at 74:26. It is a crucial issue and companies servicing this segment are working toward solutions. Woo, for instance, says it keeps users' personal details confidential, analyses users' digital footprint to verify relationship status and professional information, uses algorithms to identify and cull out suspicious profiles, and enables women to call matched profiles without revealing their own phone numbers. "We take pride in putting women first and help like-minded people meet," says Sumesh Menon, Co-Founder & CEO of Woo. TrulyMadly, another player in the space uses a trust score for authenticity and gets the user Facebook-verified. Bumble, the latest entrant in the dating app space in India, will introduce a feature that will allow women to set their profiles to only show their first initial - no first or last name - and also report bad behavior. However, possibly the safest method of matchmaking or dating still remains the referrals route. So, dating apps looking to bring in the referrals mechanism in a scientific way is the new trend. For instance, Ponder, a dating app uses referrals from family members and close friends to help its users find the special one. "Ponder takes the intimacy of the traditional family introductions route, but opens it up for the 21st century to give singles greater choice and better control," says Manshu Agarwal, CEO, Ponder. "The internet and social media have given everyone a megaphone, creating even more noise. For people and companies seeking quality connections, referrals from trusted sources can help them cut through that noise to find the right partners." The underlying foundation of any relationship is trust, especially in potentially lifelong relationships. As we go into the future, online matchmaking looks certain to continue to grow at high speed but bringing in systems like referrals that leverage human trust are crucial for sustainable and safe growth.