[Edit Notes: In April, we wrote that Crowdfunding in India is waiting for ONE big deal. That deal seems to have happened this weekend. Another big deal, is already underway. In this post, Satish Kataria, The Managing Director of Catapooolt writes on what will propel crowd funding in India.]
This weekend, a small revolution brewed up the Kannada cinema. Lucia, an independent Kannada film made by an ex-IT professional, Pawan Kumar made it big. The film – a psychological thriller – was made on the total budget of Rs 71 lakhs and has been already sold to Udaya TV for about Rs 95 lakhs. The revolution – well, the film has almost 600 producers! Lucia will go down the annals of Kannada film history not only as a superbly plotted script, but also as being the first ever crowdfunded regional film which managed to raise Rs 51 lakhs in a span of just 31 days!
This film is thus yet another ratification of crowdfunding, which is a $6 Billion global phenomenon today. It is gradually firming up its presence and success in India. Lets take a look at some data.
- Total number of projects crowdfunded so far: More than 150!
- Total amount raised through crowd-funding in India: More than INR 300 Lakhs!
- Highest amount crowdfunded for a single project: INR 84 Lakhs (Onir’s film I AM)
- Highest number of contributors for a single project: 610 (Pawan Kumar’s film LUCIA)
- Crowdfunding Platforms: More than 3.
Some key demographics of Crowdfunders in India
- Average contribution per project: Rs 2,800/-
- Average number of contributors per project: 24
- Most contributors are from cities Mumbai and Delhi. Almost 60% of current funders are coming from non-metros and international destinations.
- Most crowdfunders are currently males aged between 25-40 years
(Data Source Analysis of existing platforms and key crowdfunded projects done by team at Catapooolt)
But then – is this all what will propel crowdfunding in India?
I have been propagating crowdfunding since last three years in India. These days, I am seeing a vigorous interest in this domain. With a new crowdfunding platform getting launched more frequently than ever. While I really love this fact, I wish to pen down some market realities, which new entrepreneurs, as well as some existing platforms, should definitely consider, if they really wish to make India crowdfund.
- India’s ‘Giving’ psyche: One must understand that the underlying consumer behavior in India – is in stark contrast to our global counterparts. While culture and creativity is really valued in international markets and large section of people show a penchant to be part of these creative endeavors – in India, ‘passion’ is not a significant driver towards giving. As compared to his global cousin, an Indian will always think twice while spending Rs 500/- towards a creative project – unless he really believes in the cause of the project or knows personally the person behind the project. ‘Passion giving’ is something which will still take some time in India to evolve – and so meanwhile, the platforms will have to plan different strategies. On our platform Catapoolt, we built the focus on rewards and making them more tangible for the contributors.
- Awareness Building: While the world has embraced crowd-funding and creative entrepreneurs today don’t think twice approaching their communities to access funds and resources – the trend is quiet contrasting here. While one can still understand the masses yet to warm to the idea of crowdfunding (and that too without any financial return drivers) – it seems that even the project owners are shying away from crowdfunding their projects. While on one hand most of them find it perhaps bit derogatory to seek community help for their project; on the other – most of them still don’t know what a crowd-funding campaign entails and wrongly perceive it to be some type of magic potion which can give instant results. This needs to chang and I guess its upto these evolving platforms to aid this awareness building process. At Catapoolt, we have brought some of leading national and international domain experts on board to hand hold project managers on campaigns. We are also working to develop a Crowdfunding Guide Book.
- Legal grey areas: As long as the crowdfunding platforms are not making any financial promises to the contributors, they should be theoretically safe to operate. However, to build a credible case for the industry to grow in India, it would do help if these platforms proactively approach the regulators and work with them to finetune processes so as to build long-term credibility and transparency. We are working closely with the National Crowdfunding Association of India (NCFA).
- Categories to crowdfund: While globally there are hundreds of categories which are today being crowdfunded – In India, the prominent categories are still largely restricted to either NGO causes or entertainment projects. Why aren’t these platforms looking at encouraging other categories onto this domain? I’m sure that our engineering institutes are today working on several hundred prototypes of new engineering and technology marvels – why can’t these be crowd-funded?
- Will only staying online help? They say that E-commerce in India only got a boost when they initiated the concept of cash on delivery. Similarly, crowdfunding will have to look at building an offline base to finally induce mass awareness and encouraging larger participation. Platforms also need to look at these avenues.
My confidence on the growth and potential of crowdfunding in India is high as ever. However, if we really need to build the case for this industry in India, we need to innovate and look beyond just building up the platforms.