Crowdfunding in the Americas is dominated by the United States that claims a market share of almost 97%. Globally, the US has the second largest crowdfunding market surpassed only by China. The landscape of crowdfunding in the Americas is changing rapidly both on a country level and when it comes to financing model. The overall market is experiencing continued high growth rates with both Canada, Latin America and the Caribbean gaining terrain on the US, however, from considerably lower volumes. The largest crowdfunding volumes were financed through balance sheet consumer lending, marketplace consumer lending aka p2p consumer lending and balance sheet business lending.
If you are new to crowdfunding, you might want to check out this article about the four main types of crowdfunding before reading on. It is a common misunderstanding that crowdfunding is all about the donation-based and reward-based models with a non-economic return, but a look at the numbers reveals that this is not true. Indeed, the crowdfunding models with an economic return, lending-based crowdfunding and equity-based crowdfunding, is much larger. In the Americas region, lending is responsible for approximately 93.4%, equity for 4.8%, reward for 1.0%, and donation for 0.7%. Below, we will take a closer look at these numbers.
The Market of Crowdfunding in the Americas
Mappings of data in the crowdfunding market are generally scarce, but the Cambridge Centre for Alternative Finance, an interdisciplinary academic research institute focusing on the study of alternative finance, has published annual rapports tracking the development of the market for the US, Canada, Latin America and the Caribbean since 2016. The latest rapport of the American market is called Reaching New Heights and was published in December 2018 using the latest available data from 2017.
At P2PMarketData we work to bring transparency and clarity to the market of crowdfunding, and we are therefore focusing on bringing you data that is always updated and valid. This means that our data is more precise for a single platform, but for the moment being our dataset is less comprehensive when it comes to the overall market compared to that collected by the Cambridge Centre for Alternative Finance. Thus, this article will primarily focus on the survey data collected by the CCAF.
You can find the updated funding volumes for American platforms in p2p lending and p2p equity here. In the same way, we offer market data for platforms in mainland Europe and for platforms in the UK.
Overall Crowdfunding Volumes in the Americas
In the Americas, the total market of crowdfunding grew by 26.0% from $35.18 billion in 2016 to more than $44 billion in 2017. This is a minor increase in growth rate compared to 22.5% in 2016, but considerably lower when compared to 2015 where we saw a growth rate of 145.5%, however, from a considerably lower volume.
As noted above, the US is one of the most advanced markets in the world when it comes to crowdfunding and alternative finance, and it is absolutely dominating the statistics when it comes to crowdfunding volume in the Americas. In 2017, the US accounted for 96.5% of the total volume funded in the Americas, followed by Canada and Brazil with a market share of 1.95% and 0.61%, respectively. A complete list of crowdfunding in the Americas by country can be found below:
Second on the list after the United States, we find Canada with a market share of almost 2% – more than all of Latin America and the Caribbean combined.
Also, Canadas crowdfunding volume of $867.6m was higher than the crowdfunding volume of any country in mainland Europe where France ranked #1 with a volume of €661.4m or approximately 751.5m US dollars followed by Germany (€595.4m) and the Netherlands (€279.9m). In 2017, Canada experienced a growth of 159.4% raising its volume from $334.5m to $867.6m. Thus, Canada might look small compared to the US, but in a global country by country comparison, it is a force that must be considered – especially if it can keep up the high growth rates when reaching higher volumes.
Since many countries in Latin America and the Caribbean are still only funding at very low levels, it can be useful to group crowdfunding in the Americas by three regions to explore the development on a more overall level: United States, Canada, and Latin America together with the Caribbean. An overview of the development from 2013-2017 can be found below:
Exploring the crowdfunding volume in Latin America and the Caribbean, we see that continuing high growth rates has enabled the region to gain market share each year since 2013. Especially in 2016, the region experienced a remarkably fast growth rate of 209.3%. In 2017, Latin America and the Caribbean lost terrain in comparison to Canada but still grew by an impressive 93.8% from $342.1m to $663.1m.
In Latin America and the Caribbean, the countries of Brazil, Mexico, and Chile accounted for 86.2% of the total volume funded in 2017. With a market share of almost 41% and a volume of $269.6m, Brazil was a clear market leader in the region followed by Mexico with a market share of 22.8% and Chile with a 22.7% market share. The only country in the Caribbean with a considerable funding volume was Puerto Rico (ranked #5 in the Latin American and Caribbean region) with a regional market share of almost 5% and a funding volume of $32.2m.
Crowdfunding in the Americas by Finance Model
Looking across the Americas region, the Cambridge Centre for Alternative Finance has identified 12 different alternative finance or crowdfunding models (as well as an “Other” category). Of these, Balance Sheet Consumer Lending was the largest crowdfunding model across the region in 2017 responsible for 34.6% of the crowdfunding volume after a remarkable growth of 407.9% in 2017 from $3.02 billion to $15.34 billion. Next on the list was Marketplace/P2P Consumer Lending with a market share of 33.7% followed by Balance Sheet Business Lending with a market share of 16.4%.
The three models just mentioned accounted for almost 85% of the crowdfunding volume in the Americas, but a range of other alternative finance models also play a role in the market: Balance Sheet Business Lending (4.2%), Marketplace/P2P Business Lending (3.5%), Marketplace/P2P Property Lending (2.8%), Balance Sheet Property Lending (1.8%), Reward-based Crowdfunding (1.0%), Donation-based Crowdfunding (0.7%), Invoice Trading (0.6%), Equity-based Crowdfunding (0.6%), Other (0.2%) and Revenue/Profit Sharing Crowdfunding (0.1%).
Not all crowdfunding models have been included in all rapports, but there is enough consistency for a comparison to make sense. Below, you will find a figure presenting a collection of all the numbers available for crowdfunding in the Americas by finance model from 2014-2017.
A Global Perspective on Crowdfunding in the Americas
In 2017, the Americas region raised $44.3 billion through crowdfunding and of the $44.3 billion the United States accounted for $42.8 billion or 96.5%. From a global perspective, the European region including the UK accounted for a total of €10.4 billion (or approximately 11.8 billion US dollars). Again, one country – the UK – was the main driver of volumes with €7.1 billion and a market share of 67.7%. The same pattern is prevailing in the Asia-Pacific region, just on a much larger scale. Here, China accounted for just over 99% of the regional volume raising $358.3 billion out of $361.9 billion. Thus, even though the Americas region, and especially the US, is a much larger market compared to Europe, there is still a long way to go before catching up on China and the Asia-Pacific region.