TECH NEWS | Crowdfunding market is slowing down

The crowdfunding market has been shifting back and forth, with the annual growth rate falling by 6% and 4% in 2020 and 2022, respectively, and then rising to an average of 2.5% for the past two years. However, after a steady increase in 2023 and 2024, the entire sector is again facing a slowdown caused by market saturation and changes in investor behavior.

According to data presented by Stocklytics.com, the annual growth rate in the global crowdfunding market is expected to halve and drop to only 1.2% by 2028.

Total Number of Campaigns to Drop by 7% or 11,000

The market saturation and changing investor behavior have caused different segments of the crowdfunding market to experience different trends in the past few years. While some sectors, like equity crowdfunding and niche platforms, have seen growth, others, particularly reward-based crowdfunding, have faced challenges from competition and market fatigue, causing some campaigns to struggle to meet their goals while others were thriving.

Although crowdfunding generally remains a popular method for raising capital, especially for creative projects, the market has become more specialized and regulated, with long-term sustainability depending on innovation and transparency.

These challenges have triggered a new slowdown following an already challenging few years. According to Statista Market Insights survey, the global crowdfunding market is expected to hit $1.2 billion in transaction value in 2024, or 2.5% more than last year. However, the annual growth rate is forecasted to halve in the next four years, causing the total transaction value to increase to only $1.27 billion by 2028.

According to Statista, the annual growth rate in the crowdfunding sector will drop by 0.7% in 2025 and then continue falling to 1.2% in the next four years, representing a threefold decrease compared to 2021 figures.

The total number of campaigns will also decline. Statistics show 2024 will bring 147,400 crowdfunding campaigns, 3,600 less than last year, and 8,500 less than in 2021. The downturn will continue in the following years, with the total number of campaigns falling by another 11,000 or 7% to 136,200 in 2028.

UK Market facing biggest slowdown

Although the transaction value in the crowdfunding segment will drop on a global level, with all the major markets seeing a double-digit decline, some of them are still facing a much bigger slowdown than others.

According to Statista, the UK crowdfunding segment, the fourth largest globally, is expected to see the biggest drop, with the annual growth rate falling from 2.57% in 2024 to only 0.32% in 2028. Consequently, the transaction value in the UK market will only slightly increase from $63.1 million to $64.6 million in this period.

All other major markets, including the United States, Japan, South Korea, and Germany, will see their annual growth rates fall by an average of 47% in the next four years, ranging from 0.22% in South Korea to 1.99% in Germany. Together, these five markets will generate 76% of the total transaction value in the global crowdfunding market in 2028, the same as this year.

This article was originally posted at Stocklytics.com.

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