Market Insights Financial Capital Raising Digital Capital Raising

Reward-Based Crowdfunding - Worldwide

Worldwide

The Reward-Based Crowdfunding market worldwide is projected to reach a total transaction value of €0.96bn in 2024.
When comparing globally, it is evident that the United States leads with a transaction value of €431m in 2024.
In the United States, Crowdfunding in the Capital Raising market is experiencing a surge in popularity among tech startups seeking alternative funding sources.

Key regions: Germany, Brazil, Australia, Israel, United States

Marché

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Analyst Opinion

The Crowdfunding market is experiencing significant growth worldwide, driven by changing customer preferences and the rise of digital platforms. Crowdfunding, which allows individuals to raise funds for projects or ventures through online platforms, has become increasingly popular in recent years.

Customer preferences: One of the main reasons for the growth of the Crowdfunding market is the shift in customer preferences towards supporting innovative and socially impactful projects. Traditional sources of funding, such as banks and venture capitalists, often have strict criteria and may be hesitant to invest in risky or unconventional ideas. Crowdfunding provides an alternative avenue for entrepreneurs and individuals to showcase their ideas and gain support from a global audience. Customers are drawn to the transparency and democratization of the Crowdfunding model, as they can directly contribute to projects they believe in and see the impact of their investments.

Trends in the market: The Crowdfunding market is witnessing several key trends. Firstly, there is a growing emphasis on reward-based Crowdfunding, where backers receive non-financial rewards in exchange for their contributions. This model is particularly popular for creative projects such as films, music albums, and video games. Secondly, equity-based Crowdfunding is gaining traction, allowing investors to become shareholders in startups or small businesses. This trend is driven by the potential for financial returns and the desire to support promising ventures. Lastly, there is an increasing focus on Crowdfunding for social causes and charitable initiatives. People are more willing to contribute to projects that align with their values and have a positive impact on society.

Local special circumstances: The Crowdfunding market is influenced by local special circumstances in different countries and regions. In developed economies, where access to traditional funding may be more readily available, Crowdfunding is often used as a complementary source of capital. It allows entrepreneurs to validate their ideas and gain market support before approaching institutional investors. In emerging economies, Crowdfunding plays a more significant role in filling the funding gap for small businesses and startups. These regions may have limited access to formal financing options, and Crowdfunding provides a viable alternative for entrepreneurs to raise capital and bring their ideas to life.

Underlying macroeconomic factors: Several macroeconomic factors contribute to the growth of the Crowdfunding market. The increasing penetration of internet and mobile technology has made it easier for individuals to participate in Crowdfunding campaigns. The rise of social media platforms has also facilitated the spread of information and enabled projects to reach a wider audience. Additionally, the low-interest-rate environment in many countries has made traditional savings and investment options less attractive, leading individuals to seek higher returns through alternative investment vehicles like Crowdfunding. Overall, the Crowdfunding market is expected to continue expanding as more people embrace the concept of supporting innovative ideas and projects through digital platforms.

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.