Reward-Based Crowdfunding - South Africa

South Africa

Highlights

The Reward-Based Crowdfunding market in South Africa is expected to reach a total transaction value of US$658.50k in 2024.
When comparing globally, it is evident that the United States leads with a projected transaction value of US$465m in 2024.
South Africa's crowdfunding market is gaining traction in the capital-raising sector, attracting diverse investors and fostering innovation in various industries.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Crowdfunding market in South Africa has been experiencing significant growth in recent years.

Customer preferences: South African customers are increasingly turning to crowdfunding as a means to support innovative projects and startups. This is driven by a desire to be part of a community and contribute to causes they believe in. In addition, crowdfunding provides an opportunity for individuals to invest in projects that align with their personal values and interests. The convenience and accessibility of online platforms have also played a role in the growing popularity of crowdfunding in South Africa.

Trends in the market: One of the key trends in the South African crowdfunding market is the rise of reward-based crowdfunding. This type of crowdfunding allows individuals to contribute to a project in exchange for a reward, such as a product or service. This model has gained traction in South Africa as it provides tangible benefits to backers, while also helping entrepreneurs and startups raise the necessary funds to bring their ideas to life. Another trend in the market is the emergence of equity crowdfunding. This model allows individuals to invest in startups and small businesses in exchange for equity or shares in the company. Equity crowdfunding has gained popularity in South Africa as it provides a new avenue for investors to support local businesses and potentially earn a return on their investment.

Local special circumstances: South Africa has a vibrant entrepreneurial ecosystem, with many individuals and small businesses seeking funding to launch and grow their ventures. Traditional funding options, such as bank loans, can be difficult to access for these entrepreneurs, making crowdfunding an attractive alternative. In addition, South Africa has a strong sense of community and a culture of supporting local initiatives, which has contributed to the growth of crowdfunding in the country.

Underlying macroeconomic factors: The South African economy has faced challenges in recent years, including low economic growth and high unemployment rates. These factors have made it difficult for individuals and businesses to access traditional forms of financing. Crowdfunding has emerged as a viable solution, providing an alternative source of funding for entrepreneurs and startups. Additionally, the widespread use of smartphones and internet connectivity in South Africa has made it easier for individuals to participate in crowdfunding campaigns, further fueling the growth of the market. In conclusion, the Crowdfunding market in South Africa is experiencing significant growth due to customer preferences for community involvement and the convenience of online platforms. The rise of reward-based and equity crowdfunding models, along with the local entrepreneurial ecosystem and challenging macroeconomic factors, have contributed to the development of the market. As more individuals and businesses turn to crowdfunding as a means of financing, the market 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.