Crowdfunding Market to Reach $42.93 Billion By 2028 As Entrepreneurs are Bypassing Traditional Banks and Opting for Modern Finance Solution
Global crowdfunding market size was $17.51 billion in 2021, and it is expected to reach a value of $42.93 billion by 2028, at a CAGR of 16.40% over the forecast period (2022–2028).
Westford, USA, June 28, 2022 (GLOBE NEWSWIRE) — Crowdfunding is one of the modern financing techniques and has been utilized to fund a variety of projects, from small businesses and film productions to medical expenses and disaster relief. Although crowdfunding market has only been around for a few years, it has quickly become one of the most popular methods of fundraising. This allows entrepreneurs to bypass the traditional banking system. Banks have become increasingly reluctant to lend money to small businesses, particularly in the wake of the financial crisis. This has made it difficult for many entrepreneurs to get the funding they need to start or grow their businesses. Crowdfunding provides an alternative source of capital that is not subject to the same restrictions as bank loans.
Today, more than 50% of crowd funding campaigns achieve success while over 78% campaigns successes in getting more fund that set goals. The popularity of crowd funding is growing immensely. During 2012–2025, global crowdfunding market generated over $34.4 billion and industry experts are expecting the number would reach around $300 billion by 2025.
Donation-based Crowd Funding Accounting for 70% of Campaigns
Currently, two methods of crowdfunding are highly popular among in the global crowdfunding market, namely donation-based crowdfunding and equity crowdfunding. Donation-based crowdfunding is the most popular type of crowdfunding, accounting for 71% of all campaigns on the leading platforms. This type of campaign relies on donations from supporters with no expectation of financial return. The average donation amount is $88, but can vary greatly depending on the project and platform. The most successful donation-based campaigns have an average raised amount of $9,000.
On the other hand, equity crowdfunding market is a newer way to raise money that allows investors to receive a portion of ownership in the company or project in exchange for their investment. This type of campaign makes up 24% of all crowdfunding campaigns. The average investment amount is $1,000, but can range from just a few dollars to tens or even hundreds of thousands. The most successful equity crowdfunded projects have raised an average of $5 million.
The average success rate for donation-based crowdfunding campaigns is much higher than for equity-based crowdfunding campaigns. One platform reports a success rate of 76%, while another reports a success rate of 85%. This may be due to the fact that donation-based campaigns tend to have lower financial goals than equity-based ones. Overall, it seems that the success rate for both types in the global crowdfunding market is relatively high, though there is some variation depending on the platform and the type of campaign being funded. Equity-based crowdfunding tends to have a lower success rate than donation-based crowdfunding, but the average amount raised is usually higher in equity-based crowd funding.
