Alternative Finances

Crowdfunding Hits $16B in 2014

Crowdfunding — very broadly defined — grew by 167 percent in 2014 to raise $16.2 billion, up from $6.1 billion raised in 2013, according to newly released research by Massolution — and total global crowdfunding should reach $34.4 billion this year.

But the definition is important. Most of that money was from crowdfunded lending, which the study said grew 223 percent to just over $11 billion. (Some alternative lending platforms wouldn’t call themselves “crowdfunded,” although others don’t mind the label at all.)

The survey also found that equity-based crowdfunding grew 182 percent to $1.1 billion, while royalty-based crowdfunding climbed 336 percent to $273 million. Hybrid types of crowdfunding grew 290 percent to $487 million.

Meanwhile, the funding style that most people would agree qualifies as crowdfunding — the Kickstarter and GoFundMe variety — grew a respectable 84 percent for reward-based funding efforts and 45 percent for pure donation-based funding. (GoFundMe actually topped Kickstarter as the biggest donation and reward crowdfunding platform in 2014, the report said.)

Regionally, North America remained the biggest crowdfunding market, up 145 percent to $9.46 billion. Asia’s crowdfunding soared by 320 percent, more than quadrupling in 2014 to $3.4 billion. While Europe’s crowdfunding volumes grew 141 percent to $3.26 billion, it fell behind the Asian juggernaut. South American crowdfunding grew 167 percent, trailed by Africa, which grew 101 percent, and Australia/New Zealand, which grew 59 percent.

There was “astounding growth in the P2P lending market in Asia, stemming largely from the Chinese market,” said Massolution CEO Carl Esposti. “Further, the Top 5 crowdfunding platforms in North America increased wallet share during the period 2011-14, while in Europe the Top 5 lost 30 percent of their market share, indicating that the markets in North America and Europe are shaping up very differently.”

Esposti added that he expects Europe’s 20.1 percent of crowdfunding market share in 2014 to decline slightly in 2015 to 18.8 percent.

Not surprisingly under Massolution’s crowdfunding definition, business and entrepreneurship was the biggest category at $6.7 billion, making it 41.3 percent of global crowdfunding volume. It was followed by social causes ($3 billion, 18.9 percent), films and performing arts ($1.97 billion, 12.13 percent), real estate ($1 billion, 6.25 percent) and music and recording arts ($736 million, 4.54 percent).

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