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Crowdfunding Market Size, Share & COVID-19 Impact Analysis, By Type (Equity-based, Debt-based, Blockchain-based, and Others), By End-user (Startups, NGOs, and Individuals), and Regional Forecast, 2023-2030

Region : Global | Format: PDF | Report ID: FBI107129

 

KEY MARKET INSIGHTS

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The global crowdfunding market size was valued at USD 1.25 billion in 2022 and is projected to grow from USD 1.41 billion in 2023 to USD 3.62 billion by 2030, exhibiting a CAGR of 14.5% during the forecast period.


In this scope, we have considered crowdfunding software provided by companies such as GoFundMe, Kickstarter, Indiegogo, Inc., Double the Donation, Fundable, and others. Crowdfunding is a method to raise funds for a particular project or cause by asking many individuals and businesses to contribute money, generally in small amounts, for a relatively short period. It is done online via social networks, which makes it easy for groups to share a project or cause within their social platforms. Furthermore, it usually entails a private company asking a large number of people for small contributions.


Using social profiles, social networks, and the viral nature of web-based communication, companies and individuals have raised billions of dollars in equity, debt, and donations for projects over the past five years.



  • For instance, Kickstarter has directed over USD 815 million from 4.9 million backers to nearly 50,000 projects worldwide since 2009.


COVID-19 IMPACT


Growing Number of Funding in the Healthcare Industry Amid Pandemic is Likely to Fuel the Crowdfunding Market Growth


With the recent outbreak of COVID-19, most platforms experience difficulties with the average impact of the COVID-19 health crisis on their businesses. Crowdfunding is a great way of raising money from a large group of people, typically through an online platform. The market perceives significant growth, mainly in donation type funding, as it has supported communities, individuals, and many enterprises during the pandemic. Startups use this method to raise funds from the common public rather than going through traditional funding sources, including banks or venture capitalists. Furthermore, the growing number of donations through these platforms accelerated during the pandemic for COVID-19 treatment, oxygen relief campaigns, and hospitalization in the healthcare industry. For instance,



  • In April 2021, Ketto, a medical fundraising firm, raised above USD 139 million through its drive correlated to COVID-19 and listed a 4X growth during the pandemic.

  • In April 2020, Facebook announced Facebook Fundraiser, a program where individuals raise funds for charity to help others during the pandemic.


LATEST TRENDS


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Reward-based Campaigns by Various Businesses to Boost the Market Growth


Reward-based crowdfunding allows creators to raise seed capital and pre-seed via an online platform and bid investors a "perk" or gift for their economic contribution. It is considered as pre-sales, where a project, individual, or company, raises funds from investors and receives a non-financial reward. This allows businesses to incorporate and build on a remaining network and advertise them for later use. This type of funding is generally appropriate for early-stage companies or specific projects. For instance,


Australia-based startup Okra Solar has been testing a "plug-and-play smart controller" that makes it easy for neighbors to share electricity. The company has launched a rewards-based crowdfunding campaign to complete a small pilot to prove its technology. Additionally, the campaign raised over USD 45,000 in seed funding for the company to build a prototype. Thus, such campaigns as a platform for crowdsourcing will positively impact the crowdfunding market growth during the forecast period.


DRIVING FACTORS


Expansion of Market Aided by Use of Social Media Platforms to Boost Market Growth


Increasing crowdfunding activities on social media platforms plays a vital role to fuel the demand for upcoming crowdfunding projects. Social media and technological improvements have provided much-needed acceleration to this industry. Social media platforms such as Twitter, Facebook, LinkedIn, Reddit, and Instagram are gaining more popularity for activities to raise funds by gathering donations from investors. Furthermore, rising internet penetration and smartphone usage, as well as the increasing trend of the P2P (peer-to-peer) crowdfunding business model is expected to provide a positive outlook for the market in the coming years. For instance,



  • As per startups.com, 3% of Twitter shares, 12% of Facebook shares, and 53% of email shares convert to donations.

  • March 2022: TipSnaps - a black-owned social media firm that helps 450k users to monetize content - announced a fundraising campaign on Republic. Notable companies which have raised money on Republic include Robinhood, SpaceX, and GoPuff. This affiliation enables individuals to become early investors in the startup.


Therefore, active campaigns on social media are anticipated to boost the market growth.


RESTRAINING FACTORS


Rising Security Concerns to Hinder the Market Growth


Threats of fraudulent projects and funding quackery hamper the market growth. The lack of legal framework to secure transactions on these platforms restrain the market growth. The securities bought through equity platforms are highly volatile, and exit alternatives are limited or non-existent similar to those available to traditional venture capital investors. Therefore, the business takes years to reach its potential, and shareholders might have to wait more years for their savings to pay off. Additionally, growing cases of fraud are documented in several countries worldwide, and the extensive dangers related to these investments are expected to impede market expansion.


Therefore, low investment liquidity, associated risks, and regulatory constraints are expected to hinder the market growth.


SEGMENTATION


By Type Analysis


Increasing Popularity of Equity-based Funding Among Startups to Boost Demand for the Service


On the basis of type, the market is categorized into equity-based, debt-based, blockchain-based, and others. Debt-based segment is anticipated to hold the highest global crowdfunding market share. It is one of the most effective ways to raise startup funds. Compared to bank loans, debt-based has more advantages, similar to traditional bank loans. Furthermore, debt-based funding also gives investors better interest rates for plans in regular monthly installments. Such factors are estimated to drive growth over the coming years.


Blockchain-based segment is expected to witness rapid growth during the forecast period. It helps platforms to tackle various limitations such as large fees, high risk of fraudulent activity, Lack of transparency and others. Distributed ledger technology can improve multiple aspects of such platforms and attract many donors and creators to these platforms. Moreover, Blockchain technology offers transparency in several industries and better security, including healthcare, cybersecurity, finance, and the Internet of Things (IoT). Therefore, with the increasing demand for innovative technologies in several applications, fundraising campaigns for technologically advanced enterprises are expected to increase the blockchain-based platform’s growth.


By End-user Analysis


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Growing Demand for Crowdfunding in Startup Businesses to Boost the Market Growth


According to end-user, the market is divided into startups, NGOs, and individuals. Startups segment holds the largest market share, aiding them in testing their ideas and products in the market without a final Minimum Viable Product (MVP). Startups help in new product development, financial support, and feedback from investors and potential users on a single platform. It is a great way for startups to raise capital and build a community of supporters. It is a good way to test business ideas with the market before committing to them.


Several NGOs are raising funds using such campaigns. These campaigns provide easy access to large networks of people and assist equity in fundraising for a shorter period. Organizations are welcome to post images, links, and videos related to the cause they are fundraising for. These platforms are incorporated with major social media, including Facebook and Twitter, so that organizations can reach out to more donors. The platform can also be used through Brigade's app, where individuals and enterprises can create a network of people supporting a specific cause.


REGIONAL INSIGHTS


North America Crowdfunding Market Size, 2022 (USD Billion)

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North America is expected to dominate the global crowdfunding market during the forecast period. The increasing number of startup companies across the region is driving the regional market growth. The presence of prominent players such as GoFundMe, Indiegogo Inc., and RealCrowd provides a high potential for these activities in North America. Additionally, North America has a large number of startups in this region.


Asia Pacific is expected to experience a rapid growth rate during the forecast period. Major factors fueling the region's growth are attributed to rise in the number of startup businesses, innovative projects, and increasing internet penetration across the region, which provide better availability to these platforms. Furthermore, increasing digitization and favorable economic conditions create more lucrative opportunities for online platforms, which in turn is enhancing the Asia Pacific market growth.


Europe is expected to show a steady growth rate due to the rising number of guidelines for the crowdfunding model. The development of novel technologies and the growing number of technology companies in Europe has provided new lucrative opportunities in real estate, banking, and other industries.


The growing number of startups in South America tends to create vast opportunities in the market. Additionally, startups in innovative stages can use this platform to complement rounds leveraged by large investors and attract users, suppliers, and partners.


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Similarly, these platforms operating in the Middle East & Africa face many barriers as other businesses worldwide. Different platforms, such as Kickstarter, Indiegogo, and GoFundMe, have achieved a high level of name recognition to boost market growth.


KEY INDUSTRY PLAYERS


Focus on Business Expansions to Fuel Key Players’ Market Share


The top players are focused on expanding their geographical boundaries by introducing industry-specific solutions. These players strategically collaborate and acquire local players to gain a strong regional grip. Innovations and new product launches attract a vast customer base, thus improving revenue. The need for crowdfunding solutions is growing as they are scalable, adaptable, and effective methods to raise money. The crowdfunding market players are concentrated on augmenting their product offerings to better cater to the varying needs of investors. Consequently, leading market players focus on numerous strategic initiatives, such as mergers & acquisitions and partnerships, to stay competitive.


List of Key Companies Profiled in the Report:



KEY INDUSTRY DEVELOPMENTS:



  • October 2022: StartEngine, a capital market firm, acquired SeedInvest. The acquisition allowed StartEngine to provide more start-up founders access to raise capital online from retail investors.

  • May 2022: Alira Health acquired the RedCrow, an alternative investment crowdfunding platform that provides different investors easy access to healthcare start-ups. The integration of RedCrow enables the general public to invest in developing private medical companies.   

  • July 2021: Mercado Bitcoin, the parent company of 2TM Group, raised USD 200 million from the SoftBank Latin America Fund. It enabled them to capitalize on the increasing interest in cryptocurrencies in Brazil and Latin America, resulting in a significant increase in market share over the past years.

  • August 2021: Rare FND is the first crowdfunding platform in the blockchain space. Its modern way of fundraising helps nonprofits, startups, charities, researchers, and individuals raise millions worldwide every year.

  • October 2020: RealBlocks secured a USD 7 million Series A financing to allow and scale digital access to the Surging Alternative Investments Market. The new capital enables RealBlocks to scale its engineering teams and business development as the business battles to meet accelerating customer demand.


REPORT COVERAGE:


An Infographic Representation of Crowdfunding Market

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The study on the crowdfunding market includes prominent areas worldwide to get a better knowledge of the industry. Furthermore, the report provides insights into the most recent industry and market trends as well as an analysis of technologies that are being adopted quickly worldwide. It also emphasizes some of the growth-stimulating factors, allowing the reader to obtain a thorough understanding of the industry.


REPORT SCOPE & SEGMENTATION






















































  ATTRIBUTE



  DETAILS



Study Period



2019-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2019-2021



Growth Rate



CAGR of 14.5% from 2023 to 2030



Unit



Value (USD billion)



Segmentation



By Type, End-user, and Region



By Type




  • Equity-based

  • Debt-based

  • Blockchain-based

  • Others



By End-user




  • Startups

  • NGOs

  • Individuals



By Region




  • North America (By Type, By End-user, and By Country)

    • U.S. (By End-user)

    • Canada (By End-user)

    • Mexico (By End-user)





  • South America (By Type, By End-user, and By Country)

    • Brazil (By End-user)

    • Argentina (By End-user)

    • Rest of South America





  • Europe (By Type, By End-user, and By Country)

    • U.K. (By End-user)

    • Germany (By End-user)

    • France (By End-user)

    • Italy (By End-user)

    • Spain (By End-user)

    • Russia (By End user)

    • Benelux (By End-user)

    • Nordics (By End-user)

    • Rest of Europe





  • Middle East & Africa (By Type, By End-user, and By Country)

    • Turkey (By End-user)

    • Israel (By End-user)

    • GCC (By End-user)

    • South Africa (By End-user)

    • North Africa (By End-user)

    • Rest of Middle East & Africa





  • Asia Pacific (By Type, By End-user, and By Country)

    • China (By End-user)

    • India (By End-user)

    • Japan (By End-user)

    • South Korea (By End-user)

    • ASEAN (By End-user)

    • Oceania (By End-user)

    • Rest of Asia Pacific





Frequently Asked Questions

The global crowdfunding market is projected to grow from USD 1.41 billion in 2023 to USD 3.62 billion by 2030 with 14.5% during forecast period.

In 2022, the market stood at USD 1.25 billion.

The global market is projected to grow at a CAGR of 14.5% in the forecast period 2023-2030 to reach USD 3.62 billion by 2030.

By type, the blockchain-based segment is likely to lead the market.

Expansion of market aided by use of social media platforms to boost the market growth.

SeedInvest Technology, LLC, Double the Donation, Kickstarter, LegalVision Pty Ltd., GoFundMe, Indiegogo, Inc., Fundable, RealCrowd, Crowdcube, Patreon, and others are the top players in the market.

North America is expected to hold the highest market share.

By end-user, the individuals segment is expected to grow with the highest CAGR.

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