Crowdfunding Market to Expand by USD 310.07 Billion (2024-2028) Driven by Social Media Promotion, AI-Powered Insights- Technavio

NEW YORK, Sept. 13, 2024 -- Report on how AI is driving market transformation- The global crowdfunding market size is estimated to grow by USD 310.07 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  14.94%  during the forecast period. Increasing use of social media as a source of free-of-cost promotion is driving market growth, with a trend towards crowdfunding campaigns as avenues for crowdsourcing. However, high time-consuming process  poses a challenge. Key market players include Chuffed.org Pty Ltd., Companisto GmbH, ConnectionPoint Systems Inc., Crowdcube Ltd., Crowdera Inc, Crowdfunder Ltd., DonorsChoose, FUELADREAM Online Ventures Pvt. Ltd., Fundable LLC, Fundly Inc., GGF Global Ltd., GoFundMe Inc., Indiegogo Inc., Ioby Inc., Ketto Online Ventures Pvt. Ltd., Kickstarter PBC, Kiva Microfunds, OPENDEAL INC., Patreon Inc., and Wishberry Online Services Pvt. Ltd..

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Market Driver

In the product development and customer acquisition process, traditional methods had minimal interaction with customers before product launch. However, crowdfunding campaigns offer a significant advantage by enabling entrepreneurs to engage with their target audience, even gauging potential product success. This interaction allows for continuous enhancement of value propositions and a better understanding of customer expectations. Previously, post-purchase behavior was the primary indicator of demand-pull or technology push for a product, influencing marketing strategy investment. With the rise of crowdsourcing, campaign owners can assess demand and expectations, positively impacting the global crowdfunding market growth during the forecast period. 

Crowdfunding is a popular method for product development and fundraising for startup companies and creators in various sectors like technology and food & beverage. Artificial intelligence and machine learning are increasingly used by crowdfunding service providers to enhance customer satisfaction and influence donor decisions. Social media platforms and government efforts support women entrepreneurs in accessing pre-seed and seed capital through fundraising campaigns. Crowdfunding sites like Kickstarter, Indiegogo, and GoFundMe connect contributors with charities, filmmakers, musicians, artists, and businesses. Marketing strategies on social networking sites reach a global audience, expanding the pool of individual investors and growing companies. Equity crowdfunding allows businessmen and entrepreneurs to raise alternative capital from the public. Internet penetration continues to expand, making crowdfunding more accessible. Influencing variables include donor demographics and influencer endorsements. Cultural sector projects and charities benefit from donations, while technology startups receive seed funding. Crowdfunding platforms provide online platforms for fundraisers to reach potential investors. 

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 Market Challenges

• Crowdfunding is a method used by entrepreneurs to finance their product development and marketing efforts. This process involves several stages, including product registration, making the product compliant with standards, and securing initial investments. These pre-launch activities can be time-consuming and may lead to delays in crowdfunding projects. Fixed deadlines for project completion add pressure, and delays can result in customers withdrawing their investments, requesting refunds, or abandoning the project entirely. These issues can negatively impact investor and customer confidence in the global crowdfunding market, potentially hindering its growth during the forecast period.
• Entrepreneurs, businessmen, creators, filmmakers, musicians, and artists turn to crowdfunding markets for alternative capital when traditional channels like banks and venture capitalists fail to provide sufficient support. The public plays a crucial role in this process by offering funds through online platforms. Crowdfunding comes in various forms: reward-based, equity-based, debt-based, and donation-based. Challenges for project creators include reaching potential investors, setting realistic funding goals, and dealing with regulations. Location, credit score, and net worth may impact an investor's decision. Growth prospects, technology, and industry sectors like media & entertainment, real estate, healthcare, and technology attract significant investments. Fraud and misuse of funds are potential risks, requiring awareness and credibility for both investors and fundraisers. Debt-based and equity-based crowdfunding involve financial risks, and investors should consider the growth prospects and reputation of the business platform before investing. Small & medium investments are common, but large investments require thorough research. Regulations and investor protections are essential to maintain trust in the crowdfunding market.

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Segment Overview 

This crowdfunding market report extensively covers market segmentation by

1. Type 
   • 1.1 P2P lending
   • 1.2 Equity investment
   • 1.3 Hybrid
   • 1.4 Reward
   • 1.5 Others
2. Deployment 
   • 2.1 On-premise
   • 2.2 Cloud
3. Geography 
   • 3.1 APAC
   • 3.2 Europe
   • 3.3 North America
   • 3.4 South America
   • 3.5 Middle East and Africa

1.1 P2P lending-  In the crowdfunding market, Peer-to-Peer (P2P) lending is a popular model where a fund provider lends money directly to a borrower without the need for a financial institution. This market's growth is driven by several factors. Firstly, P2P lending allows individuals to access funds quickly for planned activities as lenders liquidate funds before loan terms end. Secondly, online portals facilitate minor investments that help small businesses. Thirdly, interest earned through P2P lending is considered part of personal savings, making it attractive. Entrepreneurs with business experience and a solid plan are likely to secure loans. Government initiatives support the market's growth. However, the market growth rate is expected to be slow due to fewer participants opting for the P2P model, especially in MEA and APAC. The success of P2P lending depends on the nature of the start-ups and projects seeking funds. Start-ups with little experience may discourage investment, and P2P lending is generally not suitable for large amounts unless it's for a business.

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Research Analysis

Crowdfunding is a revolutionary way for Entrepreneurs, Businessmen, Creators, Filmmakers, Musicians, Artists, and various individuals to raise funds for their projects. The Public plays a crucial role in this process by providing Support through Fundraisers on Online platforms. Artificial intelligence and Machine learning are increasingly being used by Crowdfunding service providers to analyze project potential and reach Startup companies and Investors. Social media platforms and Government efforts amplify reach, while Crowdfunding sites connect Creators with Contributors. Donor's decision is influenced by various factors like project description, marketing strategies, and social networking sites. The Global audience can now contribute to projects they care about, making it a powerful tool for Charities and Donation-based campaigns. Equity Crowdfunding allows investors to own a piece of the business, broadening the scope of this dynamic market.

Market Research Overview

Crowdfunding is a revolutionary method for Entrepreneurs, Businessmen, Creators, Filmmakers, Musicians, Artists, and others to raise funds for their projects from the General Public. Online platforms serve as Crowdfunding marketplaces where Project Creators present their ideas to Potential Investors. Individual investors, Startup firms, and Growing Companies seek Alternative capital through Debt-based, Reward-based, Equity-based, and Donation-based crowdfunding. Traditional channels like Banks and Venture Capitalists face competition. Regulations, Location, Credit score, Net worth, and Growth prospects influence the Crowdfunding landscape. Technology, Media & Entertainment, Real Estate, Healthcare, and other sectors leverage Crowdfunding. Fraud and Misuse of funds are concerns, but transparency and due diligence mitigate risks. Reputation and Credibility are crucial for Business platforms and Project Creators. AI, Machine Learning, and Crowdfunding Service Providers streamline the process. Equity Crowdfunding, Donation-based, and Crowdfunding for Charities gain popularity. Marketing strategies, Social media platforms, and Government efforts expand the reach of Crowdfunding. Women Entrepreneurs and Fundraising campaigns in the Food & Beverage and Technology segments benefit from this trend. Internet penetration and Crowdfunding sites attract Contributors worldwide.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
  • P2P Lending
  • Equity Investment
  • Hybrid
  • Reward
  • Others
• Deployment
  • On-premise
  • Cloud
• Geography
  • APAC
  • Europe
  • North America
  • South America
  • Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

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With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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Technavio Research
Jesse Maida
Media & Marketing Executive
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UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/

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