APN News

  • Sunday, September, 2021| Today's Market | Current Time: 03:44:50
  • Alternative Financing Industry to Hit $8.9B Transaction Value by 2023, a 20% Jump in Two Years

    Published on July 12, 2021

    Over the last five years, digital financial services like crowdinvesting and crowdfunding became an appealing alternative for thousands of investors and start-ups, connecting borrowers directly to lenders through online platforms and offering different models of investing in their business growth. As a result, the entire sector continued growing in 2020, despite the COVID-19 and shows no signs of stopping in the years to come.

    According to data gathered by BlockArabia.com, the global alternative financing industry is expected to reach $8.9bn transaction value by 2023, a 20% increase in two years.

    Crowdinvesting as the Largest Segment to hit $7.8bn Value in Two Years

    The alternative financing industry includes digital financial services for business customers. Crowdinvesting, as the market’s largest segment, focuses mainly on start-ups exchanging investment for company shares.

    On the other hand, crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.

    Between 2017 and 2019, the transaction value of the global alternative financing market jumped by almost 50%, rising from $3.9bn to $5.8bn, revealed the Statista data. In 2020, this figure increased to $6.3bn, despite the COVID-19.

    Statistics show the unified market is set to reach almost $7.5bn value in 2021 and then grow by another $1.4bn in the next two years. By 2025, the transaction value of the global alternative financing market is set to reach over $9.8bn.

    Crowdinvesting, as the market’s largest segment, is expected to hit a $7.8bn transaction value by 2023, a 23% increase in two years. By 2025, this figure is set to grow to $8.6bn. Also, last year, the average funding per campaign in the crowdinvesting segment amounted to around $103,500. This figure is set to reach $112,700 in 2021 and then jump to almost $122,000 by 2023.

    Statistics show the crowdfunding segment is forecast to reach $1.1bn value in the next two years, compared to around $1bn in 2021, with the average funding per campaign growing from $5,800 to $6,400 in this period.

    The United States to Account for 20% of Global Transaction Value, Israeli Market to Witness the Biggest Growth

    With a $1.5bn transaction value in 2021, 12.3% more than a year ago, the United States ranked as the world’s largest alternative financing market. The Statista data showed this figure is forecast to grow by 13% to $1.7bn in 2023.

    As the second-largest alternative financing market globally, China is expected to reach $1.6bn transaction value in the next two years, compared to $.1.35bn in 2021.

    However, statistics show that Israel, as the third-largest market, is set to witness even more significant growth, with transaction value growing by 30% in the next two years and reaching $1.33bn.

    The United Kingdom and the Netherlands round the top five list, with $1.1bn and $0.7bn in transaction value by 2023, respectively.