The acquisition of KissKissBankBank by Ulule comes as no surprise. The French leader in crowdfunding, symbolised by an owl, has made better use of the positive spillover effects between projects than its rival. In the crowdfunding platform market, the involvement of long-time collaborators plays a crucial role.
In early December 2024, the crowdfunding platform Ulule announced its acquisition of competitor KissKissBankBank (KKBB). This merger between the two largest players in the French crowdfunding market marks a significant turning point for the industry, which has been steadily growing for over a decade. Together, the two platforms boast a combined community of nine million users and have helped fund more than 80,000 projects, raising a total of €480 million.
The French reward-based crowdfunding market—where contributors receive non-monetary rewards in exchange for financial support—has effectively become a duopoly. Ulule and KKBB dominate the space, while a handful of much smaller platforms operate in niche markets (such as MiiMOSA in agriculture) or cater to specific regions (like Kengo in Brittany).
This duopoly mirrors the reward-based crowdfunding landscape in the United States, where Kickstarter and Indiegogo lead the market. The announced merger in France is likely to create an even more concentrated market.
A Snowball Effect
Market concentration is a common trend in the digital platform economy, where self-reinforcing mechanisms drive competition. Crowdfunding platforms, in particular, benefit from strong positive network effects. The relationship is mutually reinforcing: the more entrepreneurs join the platform, the more attractive it becomes to potential contributors seeking interesting projects and rewards. Conversely, a larger pool of potential backers increases the likelihood that entrepreneurs will meet their funding goals.
This dynamic creates a powerful competitive advantage for platforms that manage to attract more participants than their rivals. The result can be a snowball effect, leading to market dominance.
However, an opposing force can sometimes disrupt this momentum. Since entrepreneurs compete for contributors’ funds, they may hesitate to join an already saturated platform, leading to what is known as a negative network effect.
Birds of a feather flock together
In a recent study published in the Journal of Economics and Management Strategy, we show that, in reality, the opposite occurs. Using data from Ulule, which covers the funding decisions of more than 1.3 million contributors across approximately 24,000 entrepreneurial projects from 2010 to 2016, we found that projects listed on the same platform reinforce each other. Simply put, the more a user contributes to one project, the more likely they are to contribute to others in the future.
Our empirical estimates quantify these positive spillover effects. Specifically, we found that when the number of contributions in a given category doubles, the number of contributions to an individual project increases by about 1%. When looking across different categories (such as film & video vs. music), the effect is even stronger, reaching 4%.
This demonstrates that positive spillovers between projects outweigh direct competition among entrepreneurs. Ultimately, these effects generate overall positive network dynamics within the entrepreneurial ecosystem.
Wise owls lead the way
Another key finding of our study is that repeat contributors—those who fund multiple projects over time—play a critical role in driving these positive spillover effects.
First, their experience allows them to identify projects that are more likely to reach their funding goals (and thus deliver rewards). Second, repeat contributors tend to pledge their support earlier in fundraising campaigns. Since both Ulule and KKBB publicly display contributors’ funding histories, this fosters a social learning process. Occasional contributors are more likely to follow the lead of experienced backers, further reinforcing engagement.
Our analysis suggests that a crucial factor influencing the growth trajectory of crowdfunding platforms is their ability to retain repeat contributors.
Nesting recurring contributors
Figure 1 below illustrates the total monthly contributions on Ulule (Panel A) and KKBB (Panel B) during their first six years of operation.
Both platforms experienced steady growth in contributions over time, with occasional contributors (blue line) driving most of the activity. The number of repeat contributors (red line) also grew, but at different rates for the two platforms.
Ulule had a significantly higher share of repeat contributors than KKBB. Although both platforms launched around the same time, Ulule saw a faster increase in repeat contributors per project. Between 2010 and 2016, the compound annual growth rate of repeat contributors was 33.1% for Ulule, compared to just 3.0% for KKBB.
A fulgurant takeoff
Figure 2 shows the widening gap in total contributions between the two platforms over time.
Together, these figures suggest that repeat contributors played a significant role in shaping the diverging growth trajectories of Ulule and KKBB.
In summary, our findings provide further evidence that reward-based crowdfunding markets are naturally inclined toward platform dominance. The announced merger between Ulule and KKBB is a clear reflection of this trend. Beyond France, Ziegler et al. (2021) have reported increasing market concentration in crowdfunding on a global scale.
Ulule, the flight of possibilities
Beyond its implications for competition policy, our study also offers valuable insights for managing and strategizing crowdfunding platforms. One key takeaway for platform operators is the distinct role of repeat contributors, who act as social influencers within the ecosystem.
Our research indicates that projects with a higher proportion of repeat contributors tend to receive more overall contributions. This suggests that retaining existing contributors is more valuable than acquiring new ones.
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Additionally, our analysis highlights that a platform’s success is closely tied to the mix of projects launched simultaneously. Given the positive spillovers between projects, platforms can increase total contributions by carefully curating a complementary selection of campaigns.
Finally, our study underscores the importance of providing transparency on contributors’ funding decisions. Platforms like Ulule and KKBB leverage this advantage by publicly displaying contribution histories, setting them apart from larger competitors like Kickstarter and Indiegogo.
This article was republished from The Conversation under a Creative Commons license. Read the original article in French.
