Reward-Based Crowdfunding - South Korea

The Reward-Based Crowdfunding market in South Korea is expected to see a total transaction value of US$10.11m in 2024.
When comparing globally, the United States leads with a projected transaction value of US$465m in 2024.
South Korea's Crowdfunding market is rapidly expanding, with a surge in tech startups seeking alternative capital raising avenues.

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 South Korea has been experiencing significant growth in recent years.

Customer preferences: South Korean consumers have shown a strong interest in supporting innovative projects and ideas through crowdfunding. They are attracted to the idea of being part of a community that helps bring these projects to life. Additionally, South Korean consumers are increasingly seeking unique and personalized products and services, and crowdfunding provides a platform for entrepreneurs to showcase their innovative ideas.

Trends in the market: One of the key trends in the South Korean crowdfunding market is the rise of social crowdfunding. South Korean consumers are increasingly using crowdfunding platforms to support social causes and projects that have a positive impact on society. This trend reflects the growing social consciousness among consumers and their desire to contribute to meaningful initiatives. Another trend in the market is the emergence of crowdfunding platforms that cater specifically to niche markets. These platforms focus on specific industries or sectors, such as technology, fashion, or art. By targeting specific niches, these platforms are able to attract a more targeted audience and provide tailored support to entrepreneurs in those industries.

Local special circumstances: South Korea has a vibrant startup ecosystem, with a strong focus on technology and innovation. The government has implemented policies to support startups and entrepreneurship, which has created a favorable environment for crowdfunding. Additionally, South Korea has a high internet penetration rate and a tech-savvy population, which has contributed to the growth of online crowdfunding platforms.

Underlying macroeconomic factors: The South Korean economy has been growing steadily in recent years, which has led to an increase in disposable income and consumer spending. This has created a favorable environment for crowdfunding, as consumers have more money to invest in innovative projects. Furthermore, the government has implemented policies to encourage investment in startups and small businesses, which has also contributed to the growth of the crowdfunding market. In conclusion, the Crowdfunding market in South Korea has been growing due to customer preferences for innovative and personalized products, the rise of social crowdfunding, the emergence of niche crowdfunding platforms, the favorable startup ecosystem, and the underlying macroeconomic factors such as economic growth and government support.

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.