Crowdfunding is accelerating at an unprecedented rate and impacting government policy, informing enterprise innovation, and changing the role of financial institutions around the world. Massolution, a research firm specializing in the crowdsourcing and crowdfunding industries, released its annual 2013CF – Crowdfunding Industry Report. After collecting data from 308 active crowdfunding platforms worldwide and undertaking further research, the results reveal that platforms raised $2.7 billion in 2012 – an 81% increase over 2011 – and successfully funded more than one million campaigns. North America and Europe account for over 95% of the total market.
“Consistent with our 2012 forecast, total crowdfunding volume nearly doubled last year, and with regulatory bodies continuing to pave the way, we expect global crowdfunding volumes to exceed $5 billion in 2013,” said CEO of massolution, Carl Esposti . “While lending-, donation-, and reward-based crowdfunding have thus far been leading this global financial revolution, equity-based crowdfunding is about to take center stage in the U.S. The JOBS Act, which will allow non-accredited investors to make investments in exchange for equity, is expected to go into effect by the end of 2013.”
Growth Rates By Region
Although crowdfunding offers a growing number of countries opportunities to access funds, North America and Europe raised much more capital than platforms in other regions.
- North America: crowdfunding volumes grew 105% to $1.6 billion
- Europe: crowdfunding volumes grew 65% to $945 million
- In total, all other markets grew close to 125%
Growth Rates By Models
The growth in funding volumes was primarily driven by lending- and donation-based crowdfunding, and by SME adoption of reward-based crowdfunding. The growth in lending volumes mainly stemmed from crowdfunded micro-loans and community-driven loans to local SMEs.
- Donation- and Reward-based crowdfunding grew 85% to $1.4 billion
- Lending-based crowdfunding grew 111% to $1.2 billion
- Equity-based crowdfunding grew 30% to $116 million
Most Active Categories
Crowdfunding first gained popularity as a way to fund creative, philanthropic, and social endeavors. This popularity prevails, but crowdfunding’s application for entrepreneurial ventures has also gained traction. Driven by models that offer financial return, the ‘Business/Entrepreneurship’ and ‘Energy/Environment’ categories are the next highest performing categories.
- Social Causes are most active, driving close to 30% of all crowdfunding activity
- Business & Entrepreneurship (16.9%), and the two major Art Categories follow: Films & Performing Arts (11.9%) and Music & Recording Arts (7.5%)
- Energy & Environment (5.9%) is the emerging category among the five most active
“Obtaining reliable and analyzable data on all aspects regarding new constituents- and market-related activity will be critical to the creation of the new crowdfunding industry,” said EGS Managing Partner, Douglas Ellenoff . “This includes more research on funding platforms, deals, investors, amounts being raised, actually raised, industries, and geographies. For the last several years, massolution has committed itself to developing these necessary capabilities, relationships and infrastructure to be the best positioned and most reliable market leader for this purpose.”