Crowdfunding is one of the best ways to raise funds, gauge interest, and build awareness for your business idea.
If you’re considering crowdfunding for your business or investing in a venture in the UK, here are crowdfunding statistics that you need to know.
As most industries struggled to stay afloat during the pandemic, the crowdfunding market exploded in size, reaching a volume of almost $13 billion or around £9 billion in 2021. What’s more, experts project a continuous increase and a significant twofold rise by 2027.
So far this year, the average amount of collected funds per campaign, generated through crowdfunding in the UK, has reached well over $18,000.
The transaction value in the crowdfunding sector is yet another trend that’s going in an upward direction. While it is expected to reach more than $70 million in 2022, the projected numbers for 2025 are even bigger.
Crowdfunding stats show that London entrepreneurs get the biggest chunk of crowdfunding deals, especially when it comes to private equity and venture capital firms.
More than half of the deals that have been secured in the UK took place in London, even as the capital only accounts for about 37% of the country’s business companies.
Equity funding is currently the most popular model of crowdfunding for private businesses that need to raise money. What’s more, experts predict that the global 2025 equity crowdfunding report will show a number that’s three times as big.
The annual value of equity-based funding has increased by 300% from 2013 to 2020. It got from $63.1 million in 2013 to over $280 million in 2020.
As one of the most popular types of crowdfunding in the UK, the annual volume has been on the rise since 2013. It has gone from more than £30 million then to over half a billion pounds in 2020.
Independent investors, on average, give a minimum of $5,000 and a maximum of around $150,000 to startups in the first phase of funding, which is the most popular and important crowdfunding phase.
Startups can collect anywhere between $2 million and $15 million in Series A, which is the second round of startup funding. For comparison, already established businesses can raise up to $33 million in Series B, or the second round of venture capital financing.
Crowdfunding research shows that a market is a good place for female entrepreneurs. Almost a quarter of the deals go to businesses established by women and 20% of Angel investors invest in women-led businesses.
(EY via SmallBizGenius)
More than one-third of the total crowdfunding investments go towards business entities and entrepreneurs. Only half of that—20%—goes to social causes.
The crowdfunding stats for 2020 also showed that it was a great year for the industry. Crowdfunding platforms in the UK managed to secure funds of more than £9 billion.
Still, the US dominated the market, where they raised $73.6 billion.
According to Nesta’s CrowdingIn directory, there are over 65 sites for crowdfunding in the UK. They differ in crowdfunding model, commission, and maximum investment period, so there is something for everybody, from startups to already developed businesses.
Crowdfunding research has shown that companies with the most successful fundraising efforts often start and end strong.
Experts say that it’s key to start your fundraising efforts earlier than competitors and come up with the right marketing strategy at the very end because campaigns, in general, raise almost half of the amount of money in the first and last three days.
(TheCrowdDataCenter via Alternative Finances Online)
Kickstarter leads the crowdfunding platform market with 383,218 completed projects over a 7-year-period (from 2014 to April 2021). The platform boasts the highest number of backers—135 per project, on average– making it an excellent choice for all crowdfunding endeavours.
(TheCrowdDataCenter via Alternative Finances Online)
When it comes to crowdfunding campaigns and their success rate, Fundrazr is at the top of the list.
With a 42% success rate, it is closely followed by Kickstart at a 37.1% success rate. Crowdfunder and Indiegogo recorded a 16.7% and 12.8% success rate respectively.
The most successful funding campaign on Kickstarter is Pebble’s second smartwatch project. Kickstarter statistics show the company had 78,471 backers that helped it generate a record-breaking amount of funds.
(Global Alternative Finance Market Benchmarking Report)
China continues to lead the alternative market with £157.19 billion in alternative financial models that expand beyond mere crowdfunding. Reports show that the US comes second with a £44.6 billion chunk, followed by the UK, with £7.31 billion.
Crowdfunding data shows that donation-based crowdfunding accounted for the largest chunk of the alternative finance market in the UK, as of 2020, when it recorded $5.7 billion in funding value.
Due to its various funding campaigns, the UK has had the largest share in the European alternative finance market for years now. Although the numbers have gone down since 2015, when the UK held 81% of the shares in the market, it still accounts for more than half of it.
Crowdfunding has taken the financing world by storm and based on the latest crowdfunding statistics, it is here to stay. There are plenty of benefits that come with utilising the crowdfunding market, whether you’re a startup, an established entrepreneur, or you’re into investments and donations, the UK crowdfunding market is the right place to go.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.