Digital Capital Raising - New Zealand

The Digital Capital Raising market market in New Zealand is projected to reach a total transaction value of US$13.15m in 2024.
In this market, MarketMarketplace Lending (Consumer) is expected to dominate with a projected total transaction value of US$5.78m in 2024.
When compared globally, the United States leads with the highest cumulated transaction value of US$36bn in 2024.
New Zealand's digital capital raising market is gaining momentum with a surge in blockchain-based offerings attracting both local and international investors.

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 New Zealand is experiencing significant growth and development.

Customer preferences: New Zealanders are increasingly embracing digital capital raising as a means to access investment opportunities and support local businesses. This shift in customer preferences can be attributed to several factors. Firstly, the convenience and accessibility of digital platforms make it easier for individuals to invest and raise capital from the comfort of their own homes. Secondly, the transparent nature of digital capital raising platforms provides investors with greater visibility into the businesses they are supporting, which in turn builds trust and confidence. Finally, the rise of crowdfunding and peer-to-peer lending platforms has democratized capital raising, allowing individuals to support projects and businesses that align with their personal values and interests.

Trends in the market: One notable trend in the New Zealand digital capital raising market is the increasing popularity of equity crowdfunding. This form of capital raising allows businesses to sell shares to a large number of investors, thereby spreading the risk and potentially attracting a wider pool of capital. Equity crowdfunding platforms have gained traction in New Zealand due to regulatory changes that have made it easier for businesses to raise funds from retail investors. This trend is expected to continue as more businesses recognize the benefits of equity crowdfunding and more investors seek opportunities to support local ventures. Another trend in the market is the emergence of digital lending platforms. These platforms connect borrowers with lenders, providing an alternative to traditional banking channels. Digital lending platforms offer borrowers greater flexibility and convenience, as well as potentially lower interest rates. For lenders, these platforms offer the opportunity to earn higher returns compared to traditional savings accounts. The growth of digital lending platforms in New Zealand can be attributed to the increasing demand for credit among individuals and small businesses, as well as the desire for a streamlined borrowing process.

Local special circumstances: New Zealand's relatively small population and geographic isolation present unique challenges and opportunities for the digital capital raising market. On one hand, the small size of the market means that there is limited competition among digital capital raising platforms, allowing early movers to establish a strong presence. On the other hand, the small population size also means that there is a limited pool of potential investors and borrowers, which may restrict the growth of the market. Additionally, New Zealand's geographic isolation can make it more difficult for digital capital raising platforms to attract international investors and expand their reach beyond the domestic market.

Underlying macroeconomic factors: The development of the digital capital raising market in New Zealand is also influenced by underlying macroeconomic factors. The country's stable economy and business-friendly regulatory environment provide a favorable backdrop for digital capital raising. Additionally, New Zealand's strong entrepreneurial culture and innovative spirit contribute to the growth of the market, as individuals and businesses seek new ways to access capital and support their ventures. The government's ongoing efforts to promote entrepreneurship and innovation further support the development of the digital capital raising market in New Zealand.

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.