Reward-Based Crowdfunding - Iceland

The Reward-Based Crowdfunding market in Iceland is projected to reach US$220.60k in 2024.
When comparing globally, the United States leads with a transaction value of US$465m in 2024.
In Iceland, Crowdfunding is gaining traction as an alternative capital-raising method for innovative startups in the competitive market landscape.

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 Iceland has experienced significant growth in recent years, driven by changing customer preferences and local special circumstances.

Customer preferences: Crowdfunding has become increasingly popular in Iceland as individuals and businesses seek alternative sources of funding. Customers are attracted to the crowdfunding model because it allows them to support projects and causes they believe in, while also offering the potential for financial returns. The ease and convenience of online platforms have made it easier for individuals to participate in crowdfunding campaigns, further fueling its popularity.

Trends in the market: One of the key trends in the Crowdfunding market in Iceland is the rise of reward-based crowdfunding. This model allows individuals to contribute to a project or business in exchange for a non-financial reward, such as early access to a product or exclusive experiences. This trend reflects a shift in customer preferences towards supporting local initiatives and being part of the creative process. Another trend in the market is the emergence of equity-based crowdfunding. This model allows individuals to invest in businesses in exchange for equity or shares. This trend is driven by the desire for financial returns and the opportunity to support local businesses. Equity-based crowdfunding has the potential to stimulate economic growth and innovation in Iceland by providing much-needed capital to small and medium-sized enterprises.

Local special circumstances: Iceland's small population and close-knit community have contributed to the growth of the Crowdfunding market. The country has a strong entrepreneurial spirit, and crowdfunding provides a way for individuals to turn their ideas into reality. The close-knit community also means that individuals are more likely to support local initiatives and businesses, further driving the growth of crowdfunding.

Underlying macroeconomic factors: The Crowdfunding market in Iceland has also been influenced by underlying macroeconomic factors. The country has a strong and stable economy, which has created a favorable environment for crowdfunding. Additionally, Iceland has a high level of internet penetration, which has made it easier for individuals to participate in crowdfunding campaigns. The government has also recognized the potential of crowdfunding and has implemented policies to support its growth. In conclusion, the Crowdfunding market in Iceland has experienced significant growth due to changing customer preferences, local special circumstances, and underlying macroeconomic factors. The rise of reward-based and equity-based crowdfunding reflects a shift in customer preferences towards supporting local initiatives and businesses. The small population and close-knit community in Iceland have also contributed to the growth of crowdfunding. Overall, the Crowdfunding market in Iceland is expected to continue to expand as more individuals and businesses embrace this alternative source of funding.

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.