Market Insights Financial Capital Raising Digital Capital Raising

CrowdLending (Business) - Europe

Europe

The total transaction value in the Crowdlending (Business) market market in Europe is forecasted to reach €5.64bn in 2024.
When comparing globally, it is evident that China leads with a transaction value of €14,810m in 2024.
In France, CrowdLending for Capital Raising is gaining momentum as businesses seek alternative funding sources amidst economic uncertainty.

Key regions: China, United Kingdom, Brazil, Israel, India

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Analyst Opinion

The CrowdLending (Business) market in Europe has been experiencing significant growth in recent years, driven by changing customer preferences, emerging trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: In Europe, businesses are increasingly turning to CrowdLending as a source of financing due to its convenience and accessibility. With traditional banks becoming more stringent in their lending criteria, businesses are finding it challenging to secure loans. CrowdLending platforms offer an alternative solution by connecting businesses directly with investors, allowing them to bypass the traditional banking system. This direct connection provides businesses with greater flexibility and faster access to capital, which is particularly appealing for small and medium-sized enterprises (SMEs) looking to expand or launch new initiatives.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Europe is the rise of specialized platforms catering to specific industries or sectors. These platforms understand the unique needs and challenges faced by businesses in different sectors and tailor their offerings accordingly. For example, there are CrowdLending platforms that focus exclusively on financing renewable energy projects, while others specialize in supporting startups in the technology sector. This trend demonstrates the increasing sophistication and customization of CrowdLending services, providing businesses with more targeted financing options. Another trend in the market is the integration of technology and data analytics into the CrowdLending process. Many platforms are leveraging artificial intelligence and machine learning algorithms to assess the creditworthiness of businesses and predict their likelihood of default. By analyzing vast amounts of data, including financial statements, industry trends, and market conditions, these platforms can make more informed lending decisions. This not only reduces the risk for investors but also streamlines the lending process, making it faster and more efficient.

Local special circumstances: Each European country has its own unique set of circumstances that influence the development of the CrowdLending (Business) market. For example, in countries with a high concentration of SMEs, such as Germany and Italy, there is a strong demand for alternative financing options. CrowdLending platforms have emerged as a viable solution for these businesses, providing them with the capital they need to grow and thrive. Furthermore, regulatory frameworks also play a significant role in shaping the CrowdLending landscape in Europe. Some countries have introduced specific regulations to govern CrowdLending platforms, ensuring consumer protection and promoting transparency. These regulations help build trust in the market and attract more businesses and investors to participate.

Underlying macroeconomic factors: The overall economic conditions in Europe also contribute to the growth of the CrowdLending (Business) market. Low interest rates and sluggish economic growth have made it difficult for businesses to secure affordable financing from traditional sources. CrowdLending platforms offer an alternative avenue for businesses to access capital at competitive rates, filling the gap left by traditional lenders. Additionally, the increasing digitization of the economy has made it easier for businesses and investors to connect online. This digital transformation has facilitated the growth of CrowdLending platforms, enabling them to reach a wider audience and operate more efficiently. In conclusion, the CrowdLending (Business) market in Europe is experiencing significant growth due to changing customer preferences, emerging trends in the market, local special circumstances, and underlying macroeconomic factors. As businesses continue to seek alternative financing options and technology continues to advance, the CrowdLending market is expected to further expand and evolve in the coming years.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.