The Collaborative Economy Raises Over $800m In One Month

Who says there’s no money in sharing?

Data shows adoption rates by people will double in next year
My recent post in the WSJ Accelerator series stated that adoption of the Collaborative Economy is going to double, according to 90,000 people surveyed from the general population from the US, the UK, and Canada. Also, Bazzarvoice’s CMO, Lisa Pearson, points out that the peer-to-peer commerce movement is growing as people are now able to get goods, services, space, transportation, and money from each other. All of this information is well-known to VCs already. Their access to the startups they invest in allows them to see raw growth numbers from the startups themselves. Over the past year I’ve chronicled funding in this spaceanalyzed the investors, and broken down average funding amounts, but I was amazed by the funding in this one, single month of April.

Collaborative Economy funding in April 2014: 

Bubble or Bull Market?
For context, publicly-traded Twitter has raised a total of 1.2 billion over its eight year lifetime while Facebook has raised $2.4 billion over the ten years of its lifetime. Not everyone agrees that this growth is for the best. Forbes magazine took me to task for my Tweets, suggesting that the tech space is getting inflated and that we are in the midst of a bubble. There’s no question that this new market has many downsides, as pointed out by my recent post on the dark side of this burgeoning people economy. The big question, that folks like Neal Gorenflo at Shareable will tackle, is: “What happens when the startup and VC investors become billionaires while homeowners still struggle to maintain mortgage payments?” So, why are investors betting big on the Collaborative Economy? These scalable business models run on top of highly adopted social and mobile technologies; these startups offer high -requency of transactions, with low operating costs.

In summary: Investors expect these startups to be highly profitable.


Photo used within Creative Commons license by Tracy Olson