Digital Capital Raising - Ethiopia

The country in Ethiopia is expected to witness a total transaction value in the Digital Capital Raising market market of US$63.52k by 2024.
In 2024, MarketCrowdinvesting is anticipated to be the dominant player in the market, with a projected total transaction value of US$63.52k.
When compared globally, the United States leads in cumulated transaction value, reaching US$36bn in 2024.
Ethiopia is embracing digital platforms for capital raising, revolutionizing the traditional market landscape with innovative fundraising strategies.

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 Ethiopia is experiencing significant growth and development.

Customer preferences: Ethiopian customers are increasingly embracing digital capital raising platforms due to the convenience and accessibility they offer. These platforms allow individuals and businesses to raise capital online, eliminating the need for traditional, time-consuming methods. Customers appreciate the ease of use and the ability to access a wider pool of potential investors.

Trends in the market: One major trend in the Digital Capital Raising market in Ethiopia is the rise of crowdfunding platforms. These platforms enable individuals and businesses to raise funds from a large number of people, often through small contributions. This democratization of capital raising has opened up new opportunities for entrepreneurs and small businesses who may have previously struggled to secure funding. Additionally, the use of blockchain technology is becoming more prevalent in the market, providing increased transparency and security for investors.

Local special circumstances: Ethiopia's rapidly growing economy and increasing entrepreneurial spirit have contributed to the development of the Digital Capital Raising market. The government has recognized the importance of supporting small and medium-sized enterprises (SMEs) and has implemented policies to encourage their growth. This has created a favorable environment for digital capital raising platforms to thrive and attract both local and international investors.

Underlying macroeconomic factors: Ethiopia's strong economic growth and large population are key drivers of the Digital Capital Raising market. The country has experienced consistent GDP growth in recent years, which has led to an expansion of the middle class and increased disposable income. This has created a larger pool of potential investors who are looking for opportunities to invest their money. Additionally, the high mobile penetration rate in Ethiopia has made it easier for individuals to access digital capital raising platforms and participate in investment opportunities. In conclusion, the Digital Capital Raising market in Ethiopia is developing rapidly due to customer preferences for convenience and accessibility, as well as favorable local circumstances and underlying macroeconomic factors. The rise of crowdfunding platforms and the use of blockchain technology are key trends driving this market growth. As Ethiopia's economy continues to expand and more individuals and businesses seek funding opportunities, the Digital Capital Raising market is expected to further flourish 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.

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.