Crowdfunding as a New Approach in Accessing Capital: Systematics, Typology and Market Analysis in Europe (Przegląd Prawno-Ekonomiczny)

Summary

• Excluding China, the global alternative finance market grew continuously from $44 billion in 2015 to $113 billion in 2020.p.11
• The European alternative finance market expanded to $23.2 billion in 2019 before recording $22.6 billion in 2020 during the COVID-19 pandemic.p.13
• The United Kingdom dominated the European alternative finance landscape between 2018 and 2020, representing 47–57% of total market value.p.13
• In March 2023, Europe had 594 active crowdfunding platforms, with Germany leading at 113 platforms and the UK at 100 platforms.p.17
• The average annual volume of capital raised per crowdfunding platform in Europe grew from €16 million in 2021 to €19 million in 2022.p.17
• More than €1 billion was raised via crowdfunding platforms across 17 EU member states in 2023.p.19
• Lending-based models dominated EU crowdfunding in 2023 by generating nearly 65% of total raised funds, compared to less than 6% for equity crowdfunding.p.19

Key insights

1. The overall global alternative finance market contracted sharply from $419 billion in 2017 to $114 billion in 2020 due to developments in China.p.11
2. China's alternative financing market dropped from $359 billion in 2017 to just $1 billion in 2020 following platform insolvencies and regulatory intervention.p.11
3. Consumer lending represented the main model of alternative finance in Europe excluding the UK from 2015 to 2020, accounting for 29.2% to 41.3% of market volume.p.15
4. European platform operations remained predominantly domestic, with 82.6% of platforms operating only in a single country in 2022.p.17
5. Individual retail investors provided 87% of platform funding in the EU in 2023, contributing an average of €590 per individual investor.p.19
6. Average funding raised per project in the EU in 2023 stood at €15 thousand for lending models, €53 thousand for debt models, and €46 thousand for equity models.p.19
7. By the end of 2023, the European Union registered 159 authorized crowdfunding service providers.p.19