Investing in the many? Sharing Economy continues to grow

The entry level for to-be founders are as low as ever. Starting a digital business usually doesn’t take more than buying a domain for offering your services, and creating a Facebook …

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The entry level for to-be founders are as low as ever. Starting a digital business usually doesn’t take more than buying a domain for offering your services, and creating a Facebook page as a gratuitous marketing tool. The costs of setting up your own website are insubstantial compared to the classic brick and mortar model.

This ease of access in combination with the economic recession and hence people’s desire to find alternatives for supplementing their incomes has proven to be a fertile ground for the so-called Sharing Economy.

According to a report presented at the Financial Times Sharing Economy Summit, the new industry’s value rose to $15 billion in just seven years – that is four billion more than Facebook, Google and Yahoo’s growth combined.

It is estimated that the combined value of the Sharing Economy is set to grow to $14 billion by 2025 in Europe and with enormous potential in emerging markets the international value could even rise above $300 billion in the next decade.

But what counts as part of the new industry? Some call it a peer-to-peer renting system with the help of the internet, others even an alternative to our current economic system. What’s certain is that the Sharing Economy offers an enormous market for investment opportunities.

The industry’s poster child Airbnb has closed its latest round of funding with $500 million, led by private equity firm TPG and continues to cause streams of cold sweat erupting at hotel chain’s board meetings. The internet page for renting and offering private accommodations is currently being valued at $10 billion.

It appears that the Sharing Economy is here to stay, as it presents innumerable opportunities for people to get involved – whether it may be as a consumer, a supplier – or as an investor.

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