Digital Capital Raising - Caribbean

The Digital Capital Raising market market in Caribbean is projected to reach a total transaction value of US$637.00k in 2024.
MarketMarketplace Lending (Consumer) is set to dominate the market with a projected total transaction value of US$424.70k in 2024.
When compared globally, it is evident that the United States leads with the highest cumulated transaction value of US$36bn in 2024.
Amidst the Caribbean's evolving financial landscape, digital capital raising is gaining momentum as a preferred avenue for accessing capital markets.

Definition:

The Digital Caiptal Raising segment relates to digital financial services for business customers, and private borrowers. Included are Crowdinvesting models, which focus particularly on start-ups exchanging investment for company shares (equity-based), and Crowdfunding solutions, which are used for non-monetary compensation, for example product launches, music, art & film financing (reward-based). The market also includes bank-independent loan allocation for SMEs (Crowdlending) and for personal loans (Marketplace Lending or so-called Peer-to-Peer lending) through private or institutional investors via online platforms. In view of processing complexity, this market is focused on small and medium-sized enterprises (SMEs), freelancers and private persons. Bank financing is not considered, neither are any financial aspects that reach beyond the scope of small and medium-sized enterprises or donation-based Crowdfunding models.

Structure:

Digital Capital Raising consists of Reward-Based Crowdfunding, Crowdinvesting, Crowdlending and Marketplace Lending.

Additional Information:

The market comprises of transaction values, campaigns, average funding per campaign.

Alternative financing for SMEs and freelancers
Equity-based Crowdfunding (or Crowdinvesting)
Reward-based Crowdfunding (or Crowdfunding)
Alternative lending for SMEs and freelancers (bank-independent loans)
Online marketplaces for personal loan applications and private investors
Peer-to-Peer loans with interest rates depending on internal credit scoring of the platform provider

Traditional bank loans
Traditional venture capital investments by institutional or private investors

The Digital Capital Raising market in the Caribbean is experiencing significant growth and development, driven by various factors that are shaping the region's financial landscape.

Customer preferences: Caribbean customers are increasingly embracing digital capital raising platforms due to the convenience and accessibility they offer. With the rise of smartphones and internet penetration in the region, individuals and businesses are looking for more efficient ways to access capital. Digital platforms provide a streamlined and user-friendly experience, allowing customers to easily access funding opportunities and connect with potential investors.

Trends in the market: One of the key trends in the Caribbean's Digital Capital Raising market is the emergence of crowdfunding platforms. These platforms enable entrepreneurs and startups to raise funds from a large pool of individual investors, often through the use of social media and online marketing campaigns. This trend is particularly popular among small and medium-sized enterprises (SMEs) that may have difficulty accessing traditional forms of financing. Another trend is the increasing popularity of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, cutting out the middleman and reducing costs. This trend is driven by the demand for alternative lending options, as well as the desire for faster and more flexible financing solutions.

Local special circumstances: The Caribbean region has a unique set of circumstances that contribute to the development of the Digital Capital Raising market. One of the key factors is the relatively small size of the local financial markets, which can make it challenging for businesses to access traditional sources of capital. Digital platforms provide an alternative avenue for raising funds, allowing businesses to tap into a larger pool of potential investors. Furthermore, the Caribbean has a vibrant entrepreneurial ecosystem, with a growing number of startups and innovative businesses. These companies often face challenges in securing financing from traditional sources, making digital capital raising platforms an attractive option.

Underlying macroeconomic factors: The development of the Digital Capital Raising market in the Caribbean is also influenced by underlying macroeconomic factors. The region has been experiencing steady economic growth, with a focus on diversifying the economy and promoting entrepreneurship. This has created a favorable environment for the development of digital capital raising platforms, as businesses seek new ways to access funding and fuel their growth. Additionally, the Caribbean has a high level of financial inclusion, with a significant portion of the population having limited access to traditional banking services. Digital capital raising platforms provide an opportunity for individuals and businesses to access financing without the need for a traditional bank account. In conclusion, the Digital Capital Raising market in the Caribbean is experiencing growth and development due to customer preferences for convenience and accessibility, as well as the emergence of crowdfunding and peer-to-peer lending platforms. The region's unique circumstances, such as the small size of local financial markets and the vibrant entrepreneurial ecosystem, contribute to the growth of digital capital raising. Furthermore, underlying macroeconomic factors, including steady economic growth and high levels of financial inclusion, support the development of the market.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.