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ECrowd!2D – Streamlining the due diligence process to finance more sustainable energy projects

Periodic Reporting for period 1 - ECROWD2D (ECrowd!2D – Streamlining the due diligence process to finance more sustainable energy projects)

Reporting period: 2016-03-01 to 2016-08-31

Today, large-scale sustainable energy projects are financed by banks, corporations, investment funds and also public development funds for regional-national infrastructure projects. However, to develop a truly sustainable energy society across Europe and reach the EU’s Sustainable Development goals, more small and medium-scale sustainable energy projects (between 50.000€ and 1.000.000€) must be realized. Indeed, both our project developer partners and investors have confirmed to us that many such projects in Europe are stalled due to a lack of financing.

This becomes even more important after the ratification of the Paris agreement, meaning large investment sums must be committed to keep climate change under control. But at the same time, the aftermath of the financial crises has limited public spending, and stricter regulation for the financial sector has also limited its capacity to finance this. To cover this gap, private investment must step in, and crowdfunding arises as a perfect tool to supply financing to small and medium energy projects.

ECrowd is a positive impact crowdlending platform which enables local developers to raise debt financing through the community. ECrowd! has financed already more than 1M in projects ranging from 15.000€ to 250.000€. However, due diligence process for these projects is often is overly complex and consumes excessive, valuable time, making it expensive for smaller projects to receive financing.

As part of a broader market feasibility, ECrowd! is implementing a crowdsourced due diligence process, unlocking the enormous amount of knowledge and experience in its user base, and making the due diligence process cheaper and more agile.

The overall objective of ECrowd! is to unlock financing for small scale positive impact projects, through building a community of committed investors, and building the right tools to ensure maximum transparency and efficiency in the process. Objectives of this project were threefold:
- Create a go-to-market business plan focused on early adopter regions in Europe: A business plan containing real stakeholder input (quotes/comments) complete with our revised Business Model Canvas and benchmark comparing ECrowd!2D with competing platforms across Europe.
- Present an alpha release to potential users and collect detailed feedback: Personal interviews and focus groups with institutional investors, project developers/ESCOs, as well as an expert group from our current investor database. Stakeholders will respond to a questionnaire gathering detailed feedback on the benefits and specifications of the new ECrowd!2D innovation.
- Develop a multi-channel marketing strategy
- Discover ways to protect technology and commercial interest and freedom to operate
A summary of the activities performed and results of the study are:

Market assessment. We have carried out in depth market analysis, geographical analysis and competitor analysis. During the execution of the feasibility study we have also investigated client preferences and brand perception. The customer validation activities helped us understand the needs of our customers and the business model to approach in order to make ECrowd! grow further. We updated market figures, on a European level, and demonstrated our potential customers’ willingness to pay. We created an in-depth strategic and financial business plan.

Technological feasibility. we analysed in depth the proposed ECrowd2D process, externally with stakeholders, as well as internally checking feasibility of the existing ECrowd! platform for implementation of the ECrowd2D. An initial alpha release has been developed and discussed with our stakeholders and potential users. Important modules have been successfully added to check feasibility and prepare implementation for the ECrowd2D process

Marketing plan: We have redefined our marketing strategy and through coaching we have discovered a serious flaw in our current strategy, which we are currently in the process of correcting
Business innovation plan. A clear, realistic and updated roadmap to commercialisation has been established.

Freedom to operate: A complete freedom to operate study has been realized with positive results.

The feasibility study carried out has clearly stated potential and feasibility for the ECrowd! and ECrowd2D and that there is a huge potential market on European scale. ECrowd! has already initiated operations and counts with the resources to continue. However, to accelerate growth and implementation speed, we have started a capital raising round. Once we successfully close the round, we will pursue full implementation of the ECrowd2D process.
- Complies with EU/Global Challenges.
- Enables financing for impact projects that normally have difficult access to finance.
- ECrowd! has already financed more than 1M€ in 20 projects, showing the potential and its ability to execute
- Can be a key enabler for reaching objectives in Paris agreement
- Thanks to projects enabled by ECrowd!, CO2 emissions will be reduced. We have already reduced emissions by 3000 Tm with current portfolio of projects
- Financing faces the same challenges as food: excessive intermediation has made it a bulk product, anonymous and price is main decision factor. ECrowd! returns the direct contact between investor and project owner, ensuring transparency, allowing full transparency and local investment, offering other tangible factors than just price (interest).
- ECrowd! increase citizen participation and responsibility, by showing they can have direct impact in their environment

Financing will be an important barrier to overcome to reach Paris agreement objectives. ECrowd! is a tool to enable private participation in these investments. For both investor and project owner or developer, we offer the tools necessary for a fully transparent and efficient channel. At the same time, by converting financing in a marketing instrument, typical investment decision hurdles can be overcome and enable implementation of energy efficiency measures in industry.
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