Crowdinvesting - South Africa

South Africa

Highlights

The projected total transaction value in the Crowdinvesting market in South Africa is expected to reach US$2.75m in 2024.
When comparing globally, the United Kingdom leads with a transaction value of US$608m in 2024.
South Africa's crowdinvesting market is burgeoning, with a focus on technology startups and renewable energy projects attracting a growing number of local investors.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

Crowdinvesting, also known as equity crowdfunding, is a growing trend in South Africa. This alternative form of financing allows individuals to invest in startups and early-stage companies in exchange for equity ownership.

The Crowdinvesting market in South Africa is developing due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Customer preferences play a significant role in the development of the Crowdinvesting market in South Africa. Investors are increasingly looking for opportunities to diversify their portfolios and support local businesses.

Crowdinvesting provides a platform for individuals to invest in innovative startups and contribute to the growth of the South African economy. Additionally, investors are attracted to the potential for high returns on their investments, as successful startups can generate significant profits. Trends in the market also contribute to the development of Crowdinvesting in South Africa.

The rise of technology and the internet has made it easier for entrepreneurs to connect with potential investors. Online platforms dedicated to Crowdinvesting have emerged, providing a convenient and accessible way for individuals to participate in the market. This trend has led to an increase in the number of startups seeking funding and a corresponding increase in the number of investors looking for investment opportunities.

Local special circumstances further support the growth of the Crowdinvesting market in South Africa. The country has a vibrant entrepreneurial ecosystem, with many innovative startups and small businesses looking for funding. However, traditional financing options, such as bank loans, are often difficult to obtain for these companies.

Crowdinvesting provides an alternative source of capital, allowing entrepreneurs to access the funds they need to grow their businesses. Underlying macroeconomic factors also contribute to the development of Crowdinvesting in South Africa. The country has a relatively high unemployment rate, and entrepreneurship is seen as a way to create jobs and stimulate economic growth.

The government has implemented policies and initiatives to support entrepreneurship, including tax incentives for investors and funding programs for startups. These factors create a favorable environment for Crowdinvesting to thrive in South Africa. In conclusion, the Crowdinvesting market in South Africa is developing due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Investors are attracted to the opportunity to diversify their portfolios and support local businesses, while entrepreneurs benefit from the availability of alternative financing options. With the continued growth of technology and government support for entrepreneurship, the Crowdinvesting market in South Africa is expected to expand further in the coming years.

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.