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Startups click online Down Under

By Karl Wilson in Sydney (China Daily) Updated: 2014-03-10 07:09

Startups click online Down Under 

Eskimo Joe raised more rthan A$60,000 to cover recording costs. 

Achieving their goal within 10 days, the group wound up receiving more than A$60,000 to use toward the album's release.

Crowdfunding websites are expected to raise more than $10 billion this year compared with $2.7 billion in 2012, according to reports by Forbes.com and Reuters.

The World Bank in a report last year said "crowdfunding - and its impact on the world - is still to be fully recognized".

Startups click online Down Under

The report said crowdfunding had emerged as a multi-billion dollar global industry. Between 2009 and 2012, crowdfunding grew at an annual compound rate of 63 percent. "It shows no signs of slowing down," the World Bank said.

In Australia, crowdfunding has been around for a little over three years but is already taking off for those in the music, film and video game industries.

The concept is simple. A company sets itself up to provide a platform where a singer or filmmaker, for example, can advertise and promote a project or an idea, set a financial target and wait for people to contribute.

The platform takes a small percentage of the first project's funding, usually around 5 percent, and 1 to 2 percent of all subsequent projects.

Rick Chen, cofounder of Pozible, describes crowdfunding as the "future". "Crowdfunding may be new to most people but it is an industry that is fast gaining traction around the world."

Launched in May 2010, Pozible is said to be the third-largest in the world behind US-based platforms Kickstarter and Indiegogo.

Chen says crowdfunding now "gives the small developer" an opportunity to get his or her project "off the ground". "All we do is provide an alternative another avenue if you like. The rest is up to the individual or company," he says. "Your idea lives or dies on how you sell it to the public. Admittedly music is a little easier to sell if you have an established fan base."

Chen says crowdfunding also teaches developers how to successfully market their ideas through social media. Pozible has run more than 5,000 campaigns in Australia since its launch. "With a success rate of 55 to 63 percent we have the highest rate (of success) in the world where the average is around 43 percent."

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