Alternative Financing Industry Overview
The global alternative financing market size was valued at USD 6.62 billion in 2021 and is anticipated to increase at a CAGR of 6.3% from 2022 to 2028.
Easy access to capital in comparison with traditional funding is the key driver for the market. Moreover, increasing acceptance of alternative finance instruments, the convenience of the financing services, and the cost saved by the consumers are driving the market. The COVID-19 outbreak positively impacted the market. All over the world, small businesses have been hit very hard by the influence of the COVID-19 pandemic. To overcome this crisis, businesspersons and investors shifted to alternative financing to pursue funding and to invest, correspondingly, while staying safe from the COVID-19.
Gather more insights about the market drivers, restrains and growth of the Global Alternative Financing Market
Alternative financing refers to financial products and services that are mainly developed outside of the traditional, controlled banking and capital market sectors often accessible to customers using digital platforms, instruments, and systems. The market segment basically relates to online financial services for business customers. Globally, alternative financing activities have observed a largely mounting trajectory over the years, with China leading the global alternative finance market.
Alternative finance has made raising funds a lot easier as well as less time-consuming. For smaller businesses and startups looking to expand, alternative finance providers are often well aligned to their requirements not only because they can provide less strict measures than traditional lenders such as banks, but also because they can be more flexible and responsive while providing superior customer service.
Alternative financing is rapidly becoming a more promising financing choice for businesses of all kinds. Some fresher forms of alternative finance are largely established outside the U.S., mainly in the UK and Australia. Community shares, in use in the U.K., have been defined as “a way for co-operatives as well as community benefit societies to increase capital from individuals, who in return obtain a direct equity stake in the company.” China, U.K., and the U.S. continuously have the major online alternative finance markets for businesses. In terms of individual markets, China still had a large alternative finance volume by nation followed by the U.S. and UK derived in second and third correspondingly.
The COVID-19 pandemic had a positive effect on the market. With COVID-19 effects felt all over the world, businesses all over have required help in debt relief and financial support. During the COVID-19 pandemic, alternative financing has been mostly used by small businesses and startups to increase capital for their creative projects as well as businesses. China is extrapolated due to a restriction on lending by non-banks by specialists in recent years. SME-focused P2P marketplace and balance sheet lenders stated the maximum development in terms of institutional funding volumes. According to Enventys Partners data, the number of Kickstarter campaigns from January 2020 to April 2020 observed an increase of 8.93% over the last year in spite of the COVID-19 pandemic.
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- Alternative Lending Platform Market – The global alternative lending platform market size was valued at USD 2.24 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% from 2022 to 2030. The alternative lenders can penetrate the market due to their ability to provide effective and efficient loan services to underserved firms and individuals.
- Alternative Data Market – The global alternative data market size was valued at USD 4,448.51 million in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 52.1% from 2023 to 2030. The key drivers attributed to market expansion include the significant increase in the types of alternative information sources over the last decade.
Alternative Financing Market Segmentation
Grand View Research has segmented the alternative financing market based on type, and region:
Alternative Financing Type Outlook (Revenue, USD Million, 2017 – 2028)
Alternative Financing Regional Outlook (Revenue, USD Million, 2017 – 2028)
- North America
- Asia Pacific
- Central & South America
- Middle East & Africa
Market Share Insights
- January 2022: GoFundMe Inc. announced that it has engaged in a definitive agreement to acquire Classily. This acquisition will make a global leader in present giving through B2C and B2B, accelerating development and forming new opportunities to reach a large number of people and organizations all over the world.
- October 2020: Crowdcube Capital Ltd. and Seedrs Ltd. agreed to merge, creating a significant private equity marketplace. That has permitted numerous start-ups to raise capital without having to tap venture capital or angel investors directly.
Key Companies profiled:
Some prominent players in the global alternative financing market include
- GoFundMe, Inc.
- Patreon, Inc.
- Thunder Fund
- Indiegogo, Inc.
- Kickstarter, PBC
- Wefunder Inc.
- StartEngine Crowdfunding, Inc.
- CAMPFIRE, Inc.
- Crowdcube Capital Ltd
- FundedByMe AB
Order a free sample PDF of the Alternative Financing Market Intelligence Study, published by Grand View Research.
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