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The global crowdfunding market size is estimated to decline at a CAGR of 15.86% between 2022 and 2027. The size of the market is forecast to increase by USD 264.09 billion. The growth of the market depends on several factors, including the use of social media as a source of cost-free promotion, easy access to capital in comparison with traditional funding, and an increasing customer base.
This report extensively covers market segmentation by deployment (cloud and on-premise), type (P2P lending, equity investment, hybrid, reward, and others), and geography (APAC, North America, Europe, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The use of social media as a source of free-of-cost promotion is notably driving the market growth, although factors such as time-consuming processes may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Global Crowdfunding Market Driver
The use of social media as a source of free-of-cost promotion is notably driving crowding market growth. Social media offers an opportunity to pre-sell a product and also acts as a free-of-cost marketing tool. An active crowdfunding campaign can offer more than acquiring the funds required. Social media campaigns are feasible and can access multiple channels. Thus, by using social media, an enterprise can promote any idea free of cost, which is likely to drive the growth of the market during the forecast period.
For instance, in the US, three individuals were able to start their own respective companies by raising the majority of the funding within the first few weeks through crowdfunding platforms. These platforms include social media marketing, content creation and marketing, audience and donor outreach, and other activities. The rising presence of crowdfunding campaigns on social media platforms such as Facebook, Twitter, WhatsApp, and Instagram has made it easier, more accessible, and more convenient for people to share information and raise funds.
Key Global Crowdfunding Market Trends
Leveraging crowdfunding campaigns as avenues for crowdsourcing is the primary trend driving the crowdfunding market's growth. Traditional funding, marketing, and product launch processes were less interactive and there was little or no communication with customers before the product reached them. However, on the contrary, crowdfunding campaigns allow entrepreneurs to communicate with customers or even gauge the success of a product before its launch. In traditional methods of product development and customer acquisition, the after-purchase behavior was used to determine whether there is a demand-pull or technology push for a particular product. This technology push or demand-pull factor would reveal the investments needed in developing and executing the required marketing strategies.
However, with crowdsourcing catching attention, campaign owners are engaging with the target audience to gauge or measure the interest in the project and also to understand their expectations. This helps developers work continuously toward improving value propositions and understand the prospects of a project before its launch. Thus, the use of crowdfunding campaigns as a platform for crowdsourcing will positively impact market growth during the forecast period.
Key Global Crowdfunding Market Challenge
Crowdfunding through social media platforms is a time-consuming process, which is a major challenge impeding the crowdfunding market's growth. Crowdfunding is a long process, which involves multiple stages, including product development, finding investors for initial investments, pitching the idea to fund marketing expenses, product registration, and the expenses related to making the product compliant with standards, if any. These pre-launch operations are time-consuming for entrepreneurs and often slow down the process.
In most crowdfunding projects, deadlines are fixed by companies, based on which entrepreneurs manage to establish a customer base for the product. Any delays in delivering the projects sometimes result in customers withdrawing from projects and, in a few cases, even a complete refund of the investments to customers.
For instance, in 2018, developers of coin-sorting wallets raised funds through the Kickstarter platform, but the product did not reach customers even after a year of launch. Delays and failures like these in the market result in reduced investor confidence and negatively impact the growth of the market during the forecast period.
Key Global Crowdfunding Market Customer Landscape
The global crowdfunds market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Crowdfunding Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ConnectionPoint Systems Inc. - The company offers a crowdfunding platform namely FundRazr. Through this platform, the company allows anyone to raise funds for anything, anywhere. The company offers funding at different stages via different platforms. For instance, through the sponsifi segment, the company offers cause marketing and sponsored crowdfunding. Through the cocopay segment, the company offers a collaborative community payments tool that enables customers to crowdfund their purchases with the funds going directly to their companies.
The Crowdfunding market research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
A qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the cloud segment will be significant during the forecast period. The cloud-based crowdfunding segment is expected to gain significant adoption among large-scale organizations, especially due to innovations in data security. The emergence of SMEs, innovations in data security, cost-effectiveness, flexibility, and centralization of cloud-based crowdfunding will drive the market segment during the forecast period.
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The cloud segment showed a gradual increase in market share with USD 72.66 billion in 2017 and continued to grow by 2021. In 2022, the growth of the cloud-based crowdfunding segment is primarily attributed to increasing globalization and the presence of BFSI companies globally, which require a centralized system and software. Cloud-based crowdfunding enables these organizations to manage, automate, and optimize their recurring and repetitive business processes. Cloud-based software offers organizations greater control over their business processes and helps increase their efficiency.
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APAC is projected to contribute 62% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The rising adoption of crowdfunding in APAC is providing new opportunities for individuals and businesses to introduce new and creative ideas. Entrepreneurs in the region could also use the opportunity to test their products before they reach the market, and based on the response, they could decide whether or not these products will go into production. However, if the entrepreneurs are unable to raise funds, it allows the company more chances to pivot or iterate. This will continue to attract companies toward crowdfunding, which, in turn, will propel the growth of the market during the forecast period.
Although the COVID-19 pandemic had a negative impact on the regional market, the market is projected to continue to recover and show positive growth during the forecast period. The initiation of large-scale COVID-19 vaccination drives by various countries at the beginning of 2021 and the rising utilization of digital platforms for financial transactions, such as P2P lending improved regional business prospects. This led to increased demand for online crowdfunding, which, in turn, will enhance the growth of the market in the region during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by deployment, type, and region.
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Global Crowdfunding Market Scope |
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Report Coverage |
Details |
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Page number |
163 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Decelerate at a CAGR of 15.86% |
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Market growth 2023-2027 |
$264.09 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
17.81 |
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Regional analysis |
APAC, North America, Europe, South America, and the Middle East and Africa |
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Performing market contribution |
APAC at 62% |
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Key countries |
US, Canada, China, Australia, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Chuffed.org Pty Ltd., CircleUp Network Inc., ConnectionPoint Systems Inc., Crowdcube Ltd., Crowdera Inc., Crowdfunder Inc., DonorsChoose, FUELADREAM Online Ventures Pvt. Ltd., Fundable LLC, GGF Global Ltd., GoFundMe Inc., Indiegogo Inc., Ioby Inc., Ketto Online Ventures Pvt. Ltd., Kickstarter PBC, Kiva Microfunds, Milaap Social Ventures India Pvt. Ltd., Patreon Inc., Seedrs Ltd., and Wishberry Online Services Pvt. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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