Crowdfunding gaining momentum, study says

Apr 08, 2013
Crowdfunding, a practice which allows startup firms to raise money from small investors over the Internet, picked up steam in 2012 with some $2.7 billion invested, a study showed Monday.

Crowdfunding, a practice which allows startup firms to raise money from small investors over the Internet, picked up steam in 2012 with some $2.7 billion invested, a study showed Monday.

The study released by the research firm massolution said the amount raised last year was up 81 percent from 2011.

North America and Europe accounted for over 95 percent of the total market.

The group surveyed some 308 different crowdfunding platforms, including those allowing to make donations and sometimes receive rewards, and others based on lending or equity investments.

It found donation- and reward-based crowdfunding grew 85 percent to $1.4 billion last year, and lending-based crowdfunding grew 111 percent to $1.2 billion.

Equity-based crowdfunding, which faces greater regulatory scrutiny, grew 30 percent to $116 million.

"Consistent with our 2012 forecast, total crowdfunding volume nearly doubled last year, and with regulatory bodies continuing to pave the way, we expect global crowdfunding volumes to exceed $5 billion in 2013," said massolution Carl Esposti.

"While lending-, donation-, and -based crowdfunding have thus far been leading this global financial revolution, equity-based crowdfunding is about to take center stage in the US."

Esposti said a law allowing small investments in exchange for equity is expected to go into effect by the end of 2013 in the United States.

The survey showed accounted for $1.6 billion of the total, with a 105 percent increase last year. Europe funding volumes rose 65 percent $945 million.

About 30 percent of the crowdfunded investments went to social or philanthropic projects, and 16.9 percent for business and entrepreneurship. Films and performing arts accounted for 11.9 percent and music 7.5 percent, the study found.

Explore further: Ticketfly buying WillCall for on-premise data

add to favorites email to friend print save as pdf

Related Stories

Crowdfunding gets personal with GoFundMe

Feb 08, 2013

Brenda Lynn says her autistic 3-year-old son, Kaleo, hardly speaks, and his inability to express himself frustrates him - except when using his speech therapist's iPad.

Global ecommerce sales topped $1 tn in 2012

Feb 05, 2013

Global Internet retail sales topped $1 trillion for the first time in 2012 with the United States holding the top spot but China rising fast, a market research firm said Tuesday.

Venture capital investments up 19 percent in 4Q

Jan 20, 2012

(AP) -- Funding for startups rose 19 percent in the fourth quarter as venture capitalists fueled money into more companies in the Internet, clean technology and other sectors.

Recommended for you

Ticketfly buying WillCall for on-premise data

16 hours ago

Ticketfly Inc., a San Francisco-based technology company among several posing a challenge to Ticketmaster, is acquiring WillCall Inc., a crosstown rival that turns your smartphone into a mobile wallet at live events.

HP revenue inches up after years of decline

Aug 20, 2014

Hewlett-Packard on Wednesday reported that its quarterly revenue rose for the first time in three years, nudged by improved computer sales everywhere except Russia and China.

Restaurants experimenting with pay-in-advance tickets

Aug 20, 2014

With restaurant patrons increasingly jumping on the Internet to make reservations, some high-end eateries here and across the country are adding a new tech wrinkle: having their clientele pay for their meal in advance using ...

Chip maker Infineon to buy California firm for $3B (Update)

Aug 20, 2014

German chip maker Infineon Technologies AG says it has agreed to pay $3 billion in cash for California-based semiconductor firm International Rectifier, which produces power-management components used in everything from cars ...

User comments : 0