Digital Capital Raising - Pakistan

The total transaction value in the Digital Capital Raising market market in Pakistan is projected to reach US$5.18m in 2024.
MarketCrowdinvesting leads the market with a projected total transaction value of US$3.38m in 2024.
A global comparison reveals that the United States achieves the highest cumulated transaction value, reaching US$36bn in 2024.
Pakistan's digital capital raising market is experiencing a surge in crowdfunding platforms, providing new avenues for startups to raise capital efficiently.

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 Pakistan is experiencing significant growth and development.

Customer preferences: In recent years, there has been a growing interest among Pakistani entrepreneurs and businesses to raise capital through digital platforms. This shift in customer preferences can be attributed to several factors. Firstly, the convenience and accessibility offered by digital platforms make it easier for entrepreneurs to connect with potential investors. Additionally, digital capital raising allows for a wider reach, enabling entrepreneurs to tap into a larger pool of investors both domestically and internationally. This is particularly appealing for startups and small businesses that may struggle to access traditional funding sources.

Trends in the market: One of the key trends in the digital capital raising market in Pakistan is the rise of crowdfunding platforms. These platforms provide a space for entrepreneurs to showcase their ideas and projects, and individuals can contribute small amounts of money to support these initiatives. Crowdfunding has gained popularity in Pakistan due to its ability to democratize the investment process and provide opportunities for individuals from all walks of life to participate in funding innovative ideas. Another trend in the market is the emergence of online investment platforms that connect entrepreneurs with angel investors and venture capitalists. These platforms provide a streamlined process for entrepreneurs to pitch their ideas and secure funding from experienced investors. The digital nature of these platforms allows for efficient communication and collaboration between entrepreneurs and investors, reducing the time and effort required to raise capital.

Local special circumstances: Pakistan has a large population of tech-savvy individuals, with a significant portion of the population having access to smartphones and the internet. This digital-savvy population has created a fertile ground for the growth of the digital capital raising market. Additionally, the government of Pakistan has taken steps to promote entrepreneurship and innovation, providing support and incentives for startups and small businesses. These favorable conditions have contributed to the growth of the digital capital raising market in the country.

Underlying macroeconomic factors: Pakistan is experiencing economic growth and stability, which has created a conducive environment for investment. The government has implemented reforms to improve the ease of doing business, making it easier for entrepreneurs to start and grow their businesses. Additionally, the country has a young and dynamic workforce, which is driving innovation and entrepreneurial activity. These macroeconomic factors, combined with the increasing digital penetration in the country, have fueled the growth of the digital capital raising market in Pakistan. In conclusion, the digital capital raising market in Pakistan is witnessing significant growth and development. Customer preferences have shifted towards digital platforms due to their convenience and accessibility. Crowdfunding and online investment platforms have emerged as key trends in the market, providing opportunities for entrepreneurs to raise capital. The digital-savvy population and supportive government policies have created a favorable environment for the growth of the market. Overall, the digital capital raising market in Pakistan is expected to continue expanding 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.