Reward-Based Crowdfunding - Russia

Russia

Highlights

The Reward-Based Crowdfunding market in Russia is projected to reach a total transaction value of US$4.87m in 2024.
When compared globally, the United States leads with a transaction value of US$465m in 2024.
In Russia, Crowdfunding is gaining traction as a viable alternative for capital raising, offering diverse investment opportunities in various sectors.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

Crowdfunding has been gaining popularity in Russia in recent years, with more and more individuals and businesses turning to this alternative financing method. The Crowdfunding market in Russia is experiencing significant growth and development, driven by several key factors.

Customer preferences: One of the main reasons for the growth of the Crowdfunding market in Russia is the increasing preference for alternative financing options among individuals and businesses. Traditional lending institutions have become more stringent in their lending criteria, making it difficult for many to access loans. Crowdfunding provides an alternative avenue for raising funds, allowing individuals and businesses to bypass the traditional lending process and tap into a larger pool of potential investors.

Trends in the market: One of the trends observed in the Crowdfunding market in Russia is the rise of reward-based crowdfunding. This type of crowdfunding allows individuals and businesses to offer rewards or incentives to their backers in exchange for their financial support. This trend is driven by the desire of backers to receive something in return for their investment, whether it be a product, service, or exclusive access to certain perks. Reward-based crowdfunding has proven to be an effective way for businesses to validate their ideas and generate pre-sales before launching their products or services. Another trend in the Crowdfunding market in Russia is the increasing popularity of equity crowdfunding. This type of crowdfunding allows individuals to invest in early-stage companies in exchange for equity or ownership stakes. Equity crowdfunding provides an opportunity for investors to diversify their investment portfolios and potentially earn significant returns if the funded companies are successful. This trend is driven by the desire of investors to participate in the growth of promising startups and the potential for high returns on investment.

Local special circumstances: Russia has a large and growing population of tech-savvy individuals who are familiar with online platforms and comfortable with making online transactions. This has contributed to the growth of the Crowdfunding market in the country, as individuals are more willing to participate in crowdfunding campaigns and invest their money online. Additionally, the Russian government has taken steps to support the development of the Crowdfunding market. In 2015, new legislation was introduced to regulate crowdfunding platforms and protect the interests of investors. This has provided a more secure and transparent environment for crowdfunding activities, boosting investor confidence and encouraging more individuals and businesses to participate in crowdfunding campaigns.

Underlying macroeconomic factors: The growth of the Crowdfunding market in Russia is also influenced by underlying macroeconomic factors. The Russian economy has been facing challenges in recent years, with a decline in oil prices and economic sanctions imposed by Western countries. This has led to a tightening of credit conditions and limited access to traditional financing options for individuals and businesses. Crowdfunding provides an alternative source of funding that is not dependent on the traditional banking system, making it an attractive option for those who are unable to secure loans from traditional lenders. In conclusion, the Crowdfunding market in Russia is experiencing significant growth and development due to customer preferences for alternative financing options, the rise of reward-based and equity crowdfunding, the tech-savvy population, government support, and underlying macroeconomic factors. With these factors in play, the Crowdfunding market in Russia is expected to continue its upward trajectory 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.