Digital Capital Raising - Southeast Asia

The total transaction value in the Digital Capital Raising market market in Southeast Asia is expected to reach US$1.74bn in 2024.
MarketCrowdlending (Business) leads the market with a projected total transaction value of US$1.40bn in 2024.
When compared globally, the United States is set to achieve the highest cumulated transaction value of US$36bn in 2024.
In Southeast Asia, the growing trend of utilizing blockchain technology for digital capital raising is revolutionizing the capital raising market landscape.

Definition:

The Digital Caiptal Raising segment relates to digital financial services for business customers, and private borrowers. Included are Crowdinvesting models, which focus particularly on start-ups exchanging investment for company shares (equity-based), and Crowdfunding solutions, which are used for non-monetary compensation, for example product launches, music, art & film financing (reward-based). The market also includes bank-independent loan allocation for SMEs (Crowdlending) and for personal loans (Marketplace Lending or so-called Peer-to-Peer lending) through private or institutional investors via online platforms. In view of processing complexity, this market is focused on small and medium-sized enterprises (SMEs), freelancers and private persons. Bank financing is not considered, neither are any financial aspects that reach beyond the scope of small and medium-sized enterprises or donation-based Crowdfunding models.

Structure:

Digital Capital Raising consists of Reward-Based Crowdfunding, Crowdinvesting, Crowdlending and Marketplace Lending.

Additional Information:

The market comprises of transaction values, campaigns, average funding per campaign.

Alternative financing for SMEs and freelancers
Equity-based Crowdfunding (or Crowdinvesting)
Reward-based Crowdfunding (or Crowdfunding)
Alternative lending for SMEs and freelancers (bank-independent loans)
Online marketplaces for personal loan applications and private investors
Peer-to-Peer loans with interest rates depending on internal credit scoring of the platform provider

Traditional bank loans
Traditional venture capital investments by institutional or private investors

The Digital Capital Raising market in Southeast Asia is witnessing significant growth and development, driven by several key factors.

Customer preferences: Customers in Southeast Asia are increasingly embracing digital capital raising platforms due to their convenience and accessibility. These platforms provide individuals and businesses with a streamlined and efficient way to raise capital, eliminating the need for traditional intermediaries and lengthy processes. Additionally, digital capital raising platforms often offer a wider range of investment opportunities, allowing customers to diversify their portfolios and potentially achieve higher returns.

Trends in the market: One of the key trends in the digital capital raising market in Southeast Asia is the rise of crowdfunding platforms. These platforms enable individuals and businesses to raise funds from a large number of investors, often through small contributions. Crowdfunding has gained popularity in the region due to its ability to democratize access to capital, allowing entrepreneurs and startups to fund their projects without relying on traditional financial institutions. Furthermore, crowdfunding platforms provide investors with the opportunity to support innovative ideas and projects that align with their interests and values. Another trend in the market is the increasing adoption of blockchain technology. Blockchain, a decentralized and transparent ledger system, has the potential to revolutionize the way capital is raised and invested. In Southeast Asia, blockchain-based platforms are being used to facilitate Initial Coin Offerings (ICOs), a form of fundraising where companies issue digital tokens in exchange for capital. ICOs have gained traction in the region due to their ability to attract a global investor base and provide liquidity to previously illiquid assets.

Local special circumstances: Southeast Asia is home to a large and diverse population, with varying levels of financial inclusion. Digital capital raising platforms have the potential to bridge this gap by providing individuals and businesses with access to capital that may not have been available to them through traditional channels. Additionally, the region's rapidly growing middle class presents a significant market opportunity for digital capital raising platforms, as more individuals seek to invest and grow their wealth.

Underlying macroeconomic factors: The digital capital raising market in Southeast Asia is also influenced by underlying macroeconomic factors. The region's strong economic growth, driven by factors such as urbanization, rising disposable incomes, and increasing internet penetration, has created a favorable environment for digital capital raising platforms to thrive. Furthermore, the region's young and tech-savvy population is more open to embracing digital financial services, including digital capital raising platforms. In conclusion, the Digital Capital Raising market in Southeast Asia is experiencing robust growth and development, driven by customer preferences for convenience and accessibility, as well as the adoption of crowdfunding platforms and blockchain technology. The region's unique circumstances, such as its diverse population and growing middle class, further contribute to the market's expansion. Moreover, underlying macroeconomic factors, including strong economic growth and a tech-savvy population, provide a supportive environment for the development of digital capital raising platforms in Southeast Asia.

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.