European Equity-Based Crowdfunding Market to Top $2.3bn in 2020

Over the last decade, crowdfunding has become one of the most popular methods of fundraising for new products, assisting millions of innovators in bringing their ideas into the market.

The practice of funding a project or venture by raising money from a large number of people through an online platform is widespread on the European market, as well, where it became an appealing financing option for many start-ups.

According to data gathered by Finanso.se, the European equity-based crowdfunding market is set to maintain its growth, reaching a $2.3bn transaction value this year.

European Equity-Based Crowdfunding Industry Doubled Since 2017

The rise of the global crowdfunding industry started during the 2008 financial crisis, when banks cut back on loans to individuals and small firms, forcing them to search for alternative funding sources.

The crowdfunding platforms removed traditional banks from the equation and connected borrowers directly to lenders, offering an ability to invest in well-defined purposes. Many of them decided to invest in equity shares or profit-related returns.

In 2017, the European equity-based crowdfunding industry reached $1.16bn value, revealed the Statista survey. Over the next two years months, the market continued growing and hit $1.88bn worth in 2019.

The 2020 data show that the transaction value of the European equity-based crowdfunding market rose by 22.3% year-on-year, while the entire market worth doubled compared to 2017 figures. According to statistics, the average funding per campaign jumped from $85,111 in 2017 to $115,271 in 2020.

The United Kingdom and the Netherlands are the Leading European Markets

Recent years have witnessed a steady growth in the number of funding campaigns in this segment of the European crowdfunding market. In 2017, there were more than 13.7 thousand successfully launched equity-based crowdfunding campaigns. By the end of 2019, their number jumped to 17.4 thousand.

The recent data show that the number of campaigns rose by 15.1% year-on-year, reaching over 20 thousand in 2020. In the next three years, the number of funding campaigns in the European equity-based crowdfunding market is expected to hit over 26.3 thousand, or nearly double the 2017 figures.

Analyzed by geography, United Kingdom represents the leading European equity-based crowdfunding market, expected to reach $834 million transaction value this year. With $459 million worth funding campaigns, the Netherlands ranked as the second-largest market in Europe. Sweden ranked on the third place with $229.4 million transaction value in 2020. Finland and Germany follow with $132.6 million and $104.5 million, respectively.