Reward-Based Crowdfunding - Estonia

in Estonia, a country known for its digital innovation, is projected to see a total transaction value in the Reward-Based Crowdfunding market reach US$279.60k in 2024.
When comparing this figure globally, it is evident that the highest transaction value is expected the United States, reaching US$465m in the same year.
Estonia's crowdfunding market is thriving, with a surge in digital start-ups utilizing platforms for capital raising, reflecting the nation's tech-savvy entrepreneurial spirit.

Definition:

Reward-Based Crowdfunding is a financing form independent from financial institutions, location of the campaign creator or investor. Reward-Based Crowdfunding campaigns can be initiated for a wide range of different purposes such as product launches, art-, music- and film-financing, software development, scientifc research etc. Usually there is a financing goal defined by funding volume and time to reach this goal for every campaign. The campaign creator publishes engaging content (e.g. photos, videos, text) that explain the goal and motivation of the fundraising. Almost everyone can participate in reward-based crowdfunding campaigns as an investor. The only prerequisite is a valid payment account.

Additional Information:

Key players in the reward-based crowdfunding campaigns are Kickstarter and Indiegogo.

Reward-based Crowdfunding
Pre-financing of products, art, music and films, software or scientific research
e.g. Kickstarter, Indiegogo

Traditional venture capital investments
Equity-based Crowdfunding (see Crowdinvesting)
Lending-based Crowdfunding (see Crowdlending)

The Crowdfunding market in Estonia has been experiencing steady growth in recent years, driven by customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Estonian consumers have shown a growing interest in crowdfunding as a means of supporting innovative projects and startups. This preference is driven by the desire to be part of the development of new ideas and technologies, as well as the potential for financial returns. Additionally, crowdfunding provides an opportunity for individuals to support causes they believe in and make a positive impact on society.

Trends in the market: One of the key trends in the Estonian crowdfunding market is the rise of equity-based crowdfunding. This type of crowdfunding allows individuals to invest in startups and small businesses in exchange for equity or shares in the company. This trend is driven by the increasing number of startups in Estonia and the desire for investors to be part of the success of these companies. Another trend in the market is the emergence of crowdfunding platforms that cater to specific sectors or industries. For example, there are platforms dedicated to supporting projects in the arts and culture sector, as well as platforms focused on technology and innovation. This trend reflects the diverse interests and preferences of Estonian consumers.

Local special circumstances: Estonia has a vibrant startup ecosystem, with a high number of tech startups per capita. This has created a favorable environment for crowdfunding, as there is a constant demand for funding to support these startups. Additionally, the Estonian government has implemented policies and initiatives to support entrepreneurship and innovation, further fueling the growth of the crowdfunding market.

Underlying macroeconomic factors: The growth of the crowdfunding market in Estonia is also influenced by underlying macroeconomic factors. Estonia has a strong economy, with low levels of unemployment and a high level of digitalization. These factors contribute to a favorable investment climate and create opportunities for crowdfunding platforms to attract both local and international investors. In conclusion, the Crowdfunding market in Estonia is driven by customer preferences for supporting innovative projects and startups, trends such as the rise of equity-based crowdfunding and sector-specific platforms, local special circumstances including a vibrant startup ecosystem and government support, and underlying macroeconomic factors such as a strong economy and digitalization. As these factors continue to evolve and develop, the crowdfunding market in Estonia is expected to grow and diversify even further.

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.