Global Crowdfunding Market to Reach $8.5 Billion

Published March 11th, 2020 - 10:18 GMT
Global Crowdfunding Market to Reach $8.5 Billion
Crowdfunding represents a method of raising capital through the collective effort of a large pool of individual investors, mostly by using online platforms. (Shutterstock)

Recent years have witnessed the rising popularity of crowdfunding, with more and more startup companies and businesses utilizing this alternative method of raising money.

According to data gathered by Finanso.se, the global crowdfunding market is set to maintain its rapid growth this year, increasing 23.3 per cent year-on-year and reaching over $8.5 billion in transaction value.

Crowdfunding represents a method of raising capital through the collective effort of a large pool of individual investors, mostly by using online platforms.

It provides streamlined financial services and connects borrowers directly to lenders by offering various models of investing in business growth, from reward and donation-based models to profit sharing and equity crowdfunding.

In 2017, the global crowdfunding market reached $3.9bn value, revealed the Statista survey. By the end of 2018, it grew by more than 35pc and reached $5.3bn worth. Since then, the transaction value of the entire crowdfunding industry increased by a remarkable 60pc. The statistics indicate this strong rising trend is expected to continue in the next three years, with the market growing 12pc year-on-year, and reaching nearly $12bn transaction value.

The recent data show the average funding per campaign in the crowdfunding segment amounts to $780 in 2020. Over the next 12 months, this figure is forecast to reach $840 and continue growing to nearly $1,000 by 2023.

The following years are also set to witness a growing number of crowdfunding campaigns. In 2017, there were more than 5.2m campaigns globally.

Over the last three years, this number doubled and jumped over 10.9m, growing 25.4pc year-on-year between 2019 and 2020. Statistics indicate the number of successfully launched crowdfunding campaigns will hit over 12m by the end of 2023.

From a global comparison, China represents the leading crowdfunding market in the world, expected to reach over $7bn in transaction value this year. Unlike Western crowdfunding industries, the Chinese market is dominated by major e-retailers like Alibaba, JD.com and Suning, leveraging their substantial consumer bases.

With $782m worth transactions or nearly 10 times less than the Chinese market, the US ranked as the second-largest crowdfunding industry globally.

The UK ranked in the third place with $100m market value, followed by France and Canada with $86m and $47m, respectively.


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