Is knowing your audience a key to a successful crowdfunding campaign?
How to raise €300.000 in 4 days for an innovative project? Let us tell you about the Peerby project and you will see how.
Peerby is a Dutch sharing platform which allows people to borrow items from their neighbors. At the beginning, the idea received a lot of exposure and the platform grew more than 500% for two years in a row.
Peerby today has a borrowing service which is free to use. They have also launched a Peerby Go, an additional rental service which is paid.
How does it work? Firstly, during the entire transaction between neighbors all products are insured against damage, theft and loss. Three-quarters of the rental amount goes to the lender and the remaining part goes to Peerby. The renter saves money (s/he does not need to buy a new product) and the lender has the opportunity to earns by borrowing something that is not using at that moment.
But how has Peerby managed to grow so much? The key was an equity-based crowdfunding campaign.
Know your audience
When the campaign was launched Peerby chose the equity-based crowdfunding because:
- The crowd wants to be involved as much as possible when it truly believes in the idea behind the project.
- It is a natural choice for Peerby since it is based on the idea of sharing with other people.
Peerby obviously knew their audience and targeted it well because in just 4 days the goal of €300.000 was reached. Still not impressed? The campaign raised almost 7 times more than the target amount (overall €2.006.261).
What were the success factors?
- Network: Peerby’s team was able to establish partnerships before the campaign was launched which enhanced the campaign's reach. Presentations and meetings with potential investors were carried out.
- Investors were attracted by the strong social cause behind the project.
- A great market potential for peer-to-peer rental.
- An external CF expert. According to the CF team, hiring an expert was important because CF is a very powerful finance tool but still complicated to exploit.
- Last but not least, the team’s motivation to carry it out was really helpful for the campaign.
However, the campaign did not run without encountering any obstacles. According to Peerby’s founder one of the main issues faced was the lack of knowledge about CF. CF being a relatively new tool in Europe, it was challenging to explain its potential to the crowd.
Impact & learnings
To conclude, let’s read the founder’s words “Once the project is online everything has to be ready and the market potential has to be clear to the team along with risks and opportunities. Pledge your goal realistically to your needs because transparency is fundamental in CF”.
Get the full case study here.