CrowdLending (Business) - Worldwide

The total transaction value in the Crowdlending (Business) market market worldwide is expected to reach US$33.70bn by 2025.
When comparing globally, China is set to achieve the highest transaction value, reaching US$17bn in 2025.
In the worldwide CrowdLending market, the United States continues to lead in innovative capital raising strategies through online platforms.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

Digital Capital Raising: market data & analysis

The CrowdLending market within the Digital Capital Raising sector is witnessing mild growth globally, influenced by factors like evolving regulatory frameworks, increased investor interest, and the rising demand for alternative funding sources among small businesses.

Customer preferences: Investors are increasingly gravitating towards CrowdLending platforms as they seek more personalized and transparent investment opportunities, reflecting a broader shift towards digital financial solutions. The growing preference for alternative funding sources among small businesses highlights a cultural shift favoring entrepreneurship and innovation. Additionally, younger demographics, particularly Millennials and Gen Z, are driving demand for accessible and community-focused funding options, valuing social impact and sustainability alongside financial returns in their investment choices.

Trends in the market: The CrowdLending market within the Digital Capital Raising sector is experiencing a notable surge as investors increasingly seek personalized and transparent funding avenues. In North America, platforms are enhancing user experiences through robust data analytics, allowing tailored investment options. Meanwhile, in Europe, regulatory frameworks are evolving to support innovative lending models while ensuring investor protection. In Asia, there’s a growing emphasis on social impact investments, with platforms catering to environmentally conscious borrowers, reflecting a shift towards sustainability and community engagement. These trends signify a transformative era for capital raising, compelling industry stakeholders to adapt strategies that align with investor values and technological advancements.

Local special circumstances: In China, the CrowdLending market is fueled by rapid digitalization and a vast population eager for alternative financing options, supported by government-backed initiatives promoting fintech innovation. In the United States, a strong entrepreneurial culture combined with a diverse investor base drives platforms to offer personalized lending solutions, while regulatory scrutiny ensures transparency and security. In the United Kingdom, a robust legal framework fosters trust in online lending, encouraging participation from both borrowers and investors. Meanwhile, Indonesia's emerging market dynamics, characterized by a youthful demographic and increasing smartphone usage, are propelling demand for accessible funding solutions that support local entrepreneurs.

Underlying macroeconomic factors: The CrowdLending market within the Digital Capital Raising Market is significantly influenced by macroeconomic factors such as digital adoption rates, regulatory frameworks, and economic stability. Countries with supportive fiscal policies and a strong emphasis on fintech innovation are witnessing accelerated growth in crowd lending activities. For instance, economies with high mobile penetration and internet accessibility, like Indonesia, are fostering a new wave of entrepreneurs seeking funding. Conversely, nations facing economic uncertainty may experience hesitancy among investors, impacting the overall market performance. Additionally, global trends in sustainability and responsible investing are shaping borrower preferences, encouraging platforms to adapt their offerings accordingly.

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 Finance 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.

CrowdLending (Business) - Worldwide

Capital Raised

Average Deal Size

Global Comparison

Number of Deals

Analyst Opinion

Methodology

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