Crowdfunding is a practice where businesses and charities raise funding through a large number of people. Here each person contributes a very small or nominal amount usually through the internet. It helps link entrepreneurs with investors or financers.
Some of the most popular ones to exist are GoFundMe, Kickstarter, Patreon, Causes, Venmo and Indiegogo. Such websites usually generate money as a percentage that is based on the amount of funds raised.
Usually used by start up firms to raise capital or by people in need of finance for some sort of emergency. But overtime such sites have opened up to artists, influencers, musicians, YouTubers and TikTokers to ensure they receive a stable and steady income to support themselves
Kickstarter is said to be the best crowdfunding company when it comes to start ups. It has raised $5.6 billion through 197,425 projects so far.
A report by Fundly states that globally $34 billion funds have been raised as of 2020. Of this $2.5 billion solely caters to equity financing, $5.5 billion towards rewards and donation and the remaining $25 billion accounts for peer to peer lending.
China is said to have the largest crowdfunding market with a finance volume of $215.4 billion. Followed by the US with $61 billion finance volume and the UK standing at $10.4 billion as per a Cambridge study. The Asia-Pacific region has been named the fastest-growing market.
As per Statista, the US takes the lead when it comes to transactional value, $504 million. By 2025 it is expected to reach a staggering $574.3 million.
This market is expected to grow by roughly 15-16% between 2021-2026. That is pretty much $196.36 billion and $300 billion by 2030.
When the pandemic struck, crowdfunding came as a saving grace for several people around the world. Many Covid-19 related campaigns were launched which catered to millions of people.