Almost everyone knows that crowdfunding platforms are a great way to launch your business idea or startup. Everyone also knows that with each year, investing in crowdfunding not only becomes more reliable, but also more profitable. This market is constantly changing, growing, and attracting new projects and sponsors. Naturally, this market also features its own patterns and fluctuations. Back in 2018, the growth of the crowdfunding market dropped by 27%, but what is happening today? According to the latest reports from P2PMarketData, in 2019 and 2020, crowdfunding not only restored its positions, but it continues to gain traction in different regions in the world.
Three countries currently dominate this market: China, the United States, and the United Kingdom. The growth of the US market is steady at 42%, with 30% growth for the UK, while Chinese investment in crowdfunding has gone down by 40% compared to the previous year. Nevertheless, China continues to be a leader in the world of crowdfunding, with a 70.7% market share. The US has a market share of 20%, while the United Kingdom claims approximately 3.5%. In descending order, the following countries are part of the list: the Netherlands, Germany, Indonesia, Japan, Australia, France, and Canada.
In this article, you will find an overview of crowdfunding indicators for various countries and regions, statistics, amount of investments, and everything you need to know to get a comprehensive idea about the global crowdfunding market in 2020.
The Chinese crowdfunding market and the Asian-Pacific region
Even after the dramatic decrease in crowdfunding investments in 2018, China still remains a serious player in this market. Negative growth of 40% and reductions in annual financing from $357.25 billion to $215.4 billion has resulted in many crowdfunding platforms shutting down, and several major Chinese companies have gone bankrupt.
The idea of crowdfunding first appeared in China back in 2013. This marked the emergence of the first platforms, and their rapid growth amazed the rest of the world. However, only two years later, in 2015, several fraudulent schemes were discovered among these platforms, which were only pretending to offer crowdfunding. These discoveries seriously impacted the reputation of the business model and the investment market as a whole, resulting in negative growth. Once again, traditional business forms (like retail investments) gained traction, and the government is still developing a more rigorous system for regulating crowdfunding platforms. The lowest market growth was recorded in 2018, as a result of the trends mentioned above. However, demand for crowdfunding in China never fully disappeared, and it continues to make up a significant part of the lending market. Experts predict that government regulation of crowdfunding will result in renewed trust in the crowdfunding business model, and the market is likely to return to positive growth.
China dominates the crowdfunding market in the Asia-Pacific region. It takes up nearly 99% of the market volume, but it’s also worth noting other countries in this region. Excluding China, the total volume of the crowdfunding market in the Asia-Pacific region is $6.12 billion – that’s 2% of the market, with a regional growth rate of 69%. The top 30 countries dominating the crowdfunding market in the Asia-Pacific region include:
- China – crowdfunding volume of $215,37 bln;
- Indonesia — crowdfunding volume of $1,45 bln;
- Australia — crowdfunding volume of $1,17 bln;
- Japan — crowdfunding volume of $1,07 bln;
- South Korea — crowdfunding volume of $753,4 mln;
- India — crowdfunding volume of $547,4 mln;
- Singapore — 16th place with crowdfunding volume of $499,7 mln.
- New Zealand — crowdfunding volume of $276,2 mln.
Crowdfunding market in North and South America
This region includes countries like the United States, Canada, countries in Latin America and the Caribbean Basin. The United States is the natural leader in this group, with a market share near 96% in this region (20% from the global crowdfunding market). The annual investment volume is $61 billion. The United States is also the only country with the potential to compete with China (if its growth continues to decline).
Canada is in close second after the United States, with a 0.30% share of the global market and a 5% growth rate as of 2018. Today, Canada continues to occupy the 10th place in the list (it was in 6th place in the global rating in 2017). The next leaders in the region are Latin American countries, such as Brazil (13th place), Chile (21th place), Mexico (24th place), Colombia (26th place), and Peru (29th place).
As a result, the top 30 countries dominating the crowdfunding market in North and South America in 2020 include:
- United States — crowdfunding volume of $61,13 bln (2nd place in the world);
- Canada — crowdfunding volume of $909,3 mln (1st place in the world);
- Brazil — crowdfunding volume of $672,2 mln;
- Chile — crowdfunding volume of $289,3 mln;
- Mexico — crowdfunding volume of $233,4 mln;
- Colombia — crowdfunding volume of $192,5 mln;
- Peru — crowdfunding volume of $158,5 mln.
Crowdfunding market in Europe and the United Kingdom
Compared to countries in America and Asia, Europe takes up a relatively small share of the global crowdfunding market. The United Kingdom leads in this region with third place in the world, a market share of 3.4% and investment volume of $10.4 billion. UK platforms are also some of the most famous and secure in the world. The Netherlands are close behind, with growth peaking in 2018, when their investment volume made up nearly $2 billion compared to $311 mln in 2017. The Netherlands are followed by Germany and France, which occupy the 6th and 9th places in the global market, accordingly.
The top 30 countries in the European region dominating the global crowdfunding market are as follows:
- United Kingdom — crowdfunding volume of $10,37 bln;
- The Netherlands — crowdfunding volume of $1,81 bln;
- Germany — crowdfunding volume of $1,28 bln;
- France — crowdfunding volume of $933,1 mln;
- Italy — crowdfunding volume of $532,6 mln;
- Spain — crowdfunding volume of $419,0 mln;
- Finland — crowdfunding volume of $379,2 mln;
- Poland — crowdfunding volume of $333,3 mln;
- Sweden — crowdfunding volume of $298,0 mln;
- Latvia — crowdfunding volume of $254,5 mln;
- Georgia — crowdfunding volume of $193,0 mln;
- Armenia — crowdfunding volume of $184,0 mln;
- Estonia — crowdfunding volume of $159,5 mln;
- Denmark — crowdfunding volume of $144,7 mln.
Crowdfunding in the Middle East, Africa, and Russia
In the Middle East, countries with significant shares in the global crowdfunding market include Israel, UAE, Jordan, Bahrain, Syria, Libya, Palestine, Saudi Arabia, Iran, Kuwait, Iraq, and Yemen. Israel dominates the crowdfunding industry in this region, with 11th place in the global ranking and the largest financing volume of $296 mln. The other countries invest a less significant amount in crowdfunding compared to countries in other regions. Based on this fact, the Middle East can be considered the weakest region in the world of crowdfunding, barely participating in its development. Experts believe this is due to the traditions underlying Islamic finance, which doesn’t support lending, thus failing to fulfill the potential of small and medium enterprises.
In 2017, the volume of the African crowdfunding market made up 43%, which shows its rapid growth, as the market size increased by 105% by 2018, reaching $209 mln. Most platforms investing in crowdfunding in this region are based outside Africa. The top local countries investing in this region include Zambia ($40 mln), Kenya ($35 mln), and part of South Africa (total $27 mln).
When it comes to Russia, which isn’t included in the global crowdfunding market ranking, indicators are much lower than those in the Middle Eastern region, but higher than in Africa. In the first half of 2019, the market volume made up 5.2 bln rubles (approximately $63 mln), a 42% decrease compared to 2018. The largest drop in investments can be found in the B2B lending sector – a 80% reduction, down to 860 mln rubles.