Digital Capital Raising - Worldwide

The total transaction value in the Digital Capital Raising market market worldwide is expected to hit US$67.59bn by 2024.
MarketMarketplace Lending (Consumer) is set to lead the market with a projected total transaction value of US$32.55bn in 2024.
When looking at a global scale, the United States is anticipated to achieve the highest cumulated transaction value, reaching US$36bn by 2024.
Amidst global economic uncertainty, Worldwide sees a surge in digital capital raising, revolutionizing the traditional 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 is experiencing significant growth worldwide. Companies and individuals are increasingly turning to digital platforms to raise capital for various purposes.

Customer preferences: One of the main reasons for the growth of the Digital Capital Raising market is the changing preferences of customers. Traditional methods of raising capital, such as bank loans and venture capital, are no longer the only options available. Customers are now seeking more flexible and efficient ways to raise funds, and digital platforms provide them with the opportunity to do so. These platforms offer a wide range of options, including crowdfunding, peer-to-peer lending, and initial coin offerings (ICOs), which attract customers looking for alternative financing solutions.

Trends in the market: One of the key trends in the Digital Capital Raising market is the rise of crowdfunding. Crowdfunding platforms allow individuals and businesses to raise capital from a large number of investors, often through small contributions. This trend is driven by the increasing popularity of social media and the ability to reach a wide audience. Crowdfunding has become a popular option for startups and small businesses that may struggle to secure traditional forms of financing. Another trend in the market is the emergence of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, cutting out the traditional intermediaries such as banks. Peer-to-peer lending offers borrowers more flexibility and potentially lower interest rates, while lenders can earn higher returns compared to traditional savings accounts. This trend is particularly prominent in countries with limited access to traditional banking services.

Local special circumstances: The development of the Digital Capital Raising market is influenced by local special circumstances in different countries. For example, in emerging markets with limited access to traditional banking services, digital platforms provide an opportunity for individuals and businesses to access capital that would otherwise be unavailable. In developed markets, where traditional financing options are more readily available, digital platforms offer an alternative that is often more efficient and cost-effective.

Underlying macroeconomic factors: The growth of the Digital Capital Raising market is also driven by underlying macroeconomic factors. Low interest rates in many countries have made traditional financing options less attractive, leading customers to explore alternative sources of capital. Additionally, the increasing digitization of the global economy has created new opportunities for digital platforms to connect investors and borrowers on a global scale. In conclusion, the Digital Capital Raising market is experiencing significant growth worldwide due to changing customer preferences, the rise of crowdfunding and peer-to-peer lending, local special circumstances, and underlying macroeconomic factors. As digital platforms continue to evolve and become more sophisticated, the market is expected to expand further, providing customers with more options for raising capital.

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.