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Reward-Based Crowdfunding - United Kingdom

United Kingdom

The United Kingdom is projected to reach a total transaction value of €57.93m in the Reward-Based Crowdfunding market by 2024.
When compared globally, the United States is expected to lead with a transaction value of €426m in 2024.
The United Kingdom is experiencing a surge in equity crowdfunding, with tech startups leading the way in raising capital from a diverse pool of investors.

Key regions: Germany, Brazil, Australia, Israel, United States

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Analyst Opinion

The Crowdfunding market in United Kingdom has been experiencing significant growth in recent years, driven by changing customer preferences and the unique circumstances of the local market.

Customer preferences: In United Kingdom, customers are increasingly turning to crowdfunding as a way to support innovative projects and ideas. Crowdfunding provides a platform for individuals to directly contribute to the success of a project or business, giving them a sense of ownership and connection. This aligns with the growing trend of consumers seeking more meaningful and personalized experiences, rather than simply purchasing products or services.

Trends in the market: One of the key trends in the crowdfunding market in United Kingdom is the rise of equity crowdfunding. This allows individuals to invest in early-stage businesses in exchange for equity stakes. This trend has been fueled by regulatory changes that have made it easier for businesses to raise funds through equity crowdfunding platforms. The appeal of equity crowdfunding lies in the potential for high financial returns, as well as the opportunity to support and be part of the growth of a promising business. Another trend in the United Kingdom crowdfunding market is the emergence of niche crowdfunding platforms. These platforms cater to specific industries or causes, allowing individuals to support projects that align with their interests or values. This trend reflects the increasing demand for more targeted and specialized crowdfunding options, as customers seek to support projects that have a personal significance to them.

Local special circumstances: The United Kingdom has a strong entrepreneurial culture and a thriving startup ecosystem, which has contributed to the growth of the crowdfunding market. The presence of renowned universities and research institutions, as well as a supportive regulatory environment, has created a fertile ground for innovative ideas and projects to flourish. Crowdfunding provides a way for entrepreneurs to access funding and validate their ideas in a relatively short amount of time, without relying solely on traditional sources of financing.

Underlying macroeconomic factors: The United Kingdom has experienced economic uncertainty in recent years, with the impact of Brexit and the COVID-19 pandemic. These factors have made it more challenging for businesses to secure traditional forms of financing, such as bank loans or venture capital. Crowdfunding has emerged as an alternative source of funding, allowing businesses to tap into a wider pool of potential investors. The flexibility and accessibility of crowdfunding platforms have made them an attractive option for businesses seeking capital in uncertain times. In conclusion, the crowdfunding market in United Kingdom is growing due to changing customer preferences, including a desire for more meaningful experiences and personalized connections. The rise of equity crowdfunding and niche platforms reflects these preferences, providing opportunities for individuals to invest in businesses and projects that align with their interests and values. The local entrepreneurial culture and supportive regulatory environment have also contributed to the growth of the crowdfunding market in United Kingdom. Additionally, the economic uncertainty caused by Brexit and the COVID-19 pandemic has further fueled the demand for crowdfunding as an alternative source of funding.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.