The global crowdfunding market is expected to grow at a CAGR (Compund Annual Growth Rate) of around 17% during in the period 2017 – 2021, according to the findings from the latest report published by Technavio, a leading research house.
The Americas, where crowdfunding is influenced by the US market which accounts for more than 85% of the total share of market in the region, lead the charge as many entrepreneurs and businesses have realized the potential of crowdfunding.
North America is one of the most developed markets for crowdfunding. Equity crowdfunding is gaining prominence and is seen as an investment opportunity by many investors. The crowdfunding market in this region overtook the venture capital model, indicating that crowdfunding is the preferred source of revenue for startup enterprises, entrepreneurs, and established companies to generate funds, says Brijesh Ujjwal Doshi, a lead analyst at Technavio.
Crowdfunding is instead experiencing tremendous growth in the APAC region as entrepreneurs are struggling because of the lack of finance. Interestingly, venture capitalists do consider these success stories, making crowdfunding the ideal platform to secure funding even if the entrepreneur lacks credit history.
The crowdfunding market is experiencing tremendous growth in APAC primarily due to the growth of the social media and a mobile-savvy population that has the potential to build credible relationships over short messages. With the legality issues being cold compared with those in the Western countries, the extreme use of mobile phones has the potential to save a lot of time, adds Ujjwal.
More traditionally, crowdfunding is considered an alternative source of financing in the EMEA region. The popularity and rapid adoption of crowdfunding, a press release states, have catapulted the market to a whole new level in this region.
A high proportion of the businesses funded by crowdfunding in the operates only on digital platforms. The probability of success of these companies is higher compared with a business based on the traditional approaches in the current Internet era. With the increasing likelihood of success, the revenue increases, which further encourages more investors to be part of crowdfunding.