Market Overview
The Global Crowdfunding Market size was valued at USD 18.56 billion in 2021 and is projected to reach USD 44.12 billion by 2028, growing at a CAGR of 17.04% during the forecast period.
The usage of crowdfunding sites to support and assist those suffering significant losses due to the epidemic is growing, enhancing the visibility and usefulness of these platforms. Some of the social causes that these crowdsourcing platforms support financially include organizations that assist and empower individuals, which are fueling industry demand internationally. The crowdfunding sector is growing more quickly, but one of the challenges it may run into in the future is how to manage and use the donations for what they were intended.
COVID-19 Impact Analysis
The COVID-19 pandemic has had a huge immediate impact on crowdfunding, even if its long-term effects are still unknown. Many Americans used charitable crowdfunding during the first year of the COVID-19 crisis to cover costs such as medical bills, burial costs, missed earnings, support for small businesses, food aid, and other necessities. After March 2020, fundraising for the coronavirus skyrocketed on websites like GoFundMe. In addition to the COVID-19 pandemic’s direct health effects, pandemic mitigation measures like stay-at-home orders led to widespread economic displacement exacerbated pre-existing economic vulnerabilities and left social safety net gaps unfilled. This is because government relief has been delayed, limited, and unevenly distributed. Charitable crowdfunding is an appealing financial tool for the epidemic era because it provides a well-known, simple-to-use, and accessible platform for providing or asking for financial assistance remotely.
Market Segmentation:
The global crowdfunding market is segmented on the basis of Type (Donation, Equity Crowdfunding, Reward-Based Crowdfunding, and Others), Sales Model (Reward, P2P Lending, Equity Investment, Hybrid, and Others), Application (Healthcare, Technology, Product, Cultural Industries, and Others), and Deployment Type (On-Premise and Cloud).
By type, equity crowdfunding holds the largest revenue share of the total funding market in 2021
Equity crowdfunding holds the largest revenue share of the total funding market in 2021, as seed capital is an important factor considered to make the business run in the long run. As start-ups require this substantial capital when they are in the pre-profit-making stage, they choose to raise it through equity crowdfunding and draw investors to the business. All of this enables businesses to interact, create new networks, and socialize in ways that they may later use.
By application, the technology segment accounted for the potential growth of the crowdfunding market in 2021.
The technology segment accounted for the potential growth of the crowdfunding market in 2021. One of the causes for increased funding and expanding revenue share of the technology segment is the increasing application of various AI and ML technological developments in many industries.
Market Dynamics:
Drivers:
Increasing Number of Startups
Growing start-up businesses globally are a contributing factor to the growth of the crowdfunding market because these markets enable start-up businesses to raise capital during the pre-profit stage of their venture. In North America, 17.5% of the population is currently involved in starting a business. This demonstrates the sizeable quantity in the area and is anticipated to increase in the future as well, leading to an expansion of the crowdfunding market. For instance, Volodymyr Zelensky, the president of Ukraine, announced a global crowdfunding portal in May 2022 to generate money that would be delivered directly to the nation’s central bank and assist Kyiv in reconstructing its infrastructure. Additionally, in May 2022, Crowdcube, a supplier of equity crowdfunding services, began operating in France. It appears to be a fantastic idea and promises to assist a French technology business in raising Series A financing using stock from this crowdfunding platform.
Increasing use of social media with zero promotional charge
One of the key factors driving the rise of the crowdfunding industry is free social media promotion. It works as both a low-cost marketing approach and a way to pre-sell a product. As a result, a successful crowdfunding campaign can achieve more than just raising money. These advertisements are inexpensive and effective in immediately reaching a variety of channels. Social media is a popular tool for crowdfunding initiatives because it enables them to track referral traffic to their websites. As a result, a business can use social media to advertise an idea for nothing, and this is anticipated to drive the global crowdfunding market throughout the course of the projected period.
Regional Analysis:
Europe holds the largest market share
Europe dominates the global crowdfunding market in 2021. Due to the region’s expanding participation of nations that have accepted and adapted the crowdfunding procedure, both the market size and revenue growth are anticipated to increase at the same rate. The European Union has made the decision to extend the use of the crowdfunding mechanism to a number of other European regions. The internet’s widespread use and the rising usage of social media for crowdfunding on behalf of a cause will be the main drivers of North America and the Asia Pacific regions’ fastest CAGR growth in the foreseeable future. The sector will increase in the coming years because of the steps taken by crowdsourcing groups and various multimedia platforms.
Key Market Players and Competitive Landscape
The key players in the market are Kickstarter PBC (US), Indiegogo Inc. (US), GoFundMe Inc. (US), Patreon (US), Fundable LLC (US), Crowdcube Limited (UK), GoGetFunding (UK), Crowdfunder Inc. (UK), Alibaba Group Holding Limited (China), Wefunder Inc. (US), Fundly (US), Jingdong Inc. (China), Suning.com Co. Ltd (China), Owners Circle (Malaysia), Realcrowd Inc. (US), and among others.
This report categorizes the crowdfunding market as follows,
Based on Type:
- Donation
- Equity Crowdfunding
- Reward-Based Crowdfunding
- Others
Based on Sales Model:
- Reward
- P2P Lending
- Equity Investment
- Hybrid
- Others
Based on Application:
- Healthcare
- Technology
- Product
- Cultural Industries
- Others
Based on Deployment Type:
Based on Type:
- Donation
- Equity Crowdfunding
- Reward-Based Crowdfunding
- Others
Based on Sales Model:
- Reward
- P2P Lending
- Equity Investment
- Hybrid
- Others
Based on Application:
- Healthcare
- Technology
- Product
- Cultural Industries
- Others
Based on Deployment Type:
