Crowdfunding is a financial and strategic tool for businesses that has now been in use for more than a decade, but its history is peppered with continuous innovations and transformations that are not yet over: it can be said to still be an experimental tool, with wide room for diffusion and affirmation and multiple possibilities for regulatory and operational change. 

In order to always make the most of its potential for businesses, it is useful to stay abreast of what is new in the crowdfunding world: in this article we propose a Overview of emerging trends and prospects for the future of crowdfunding.

Crowdfunding today: scenario and emerging trends

In 2024, the global crowdfunding market. Is estimated at about $2 billion, although there is no agreement on the precise figure among different statistical sources, due to the different methodologies of analysis and the different scope of the concept of "crowdfunding" adopted by different research institutions. This discrepancy is an indication of an industry still in the process of consolidation and standardization. However, a general consensus emerges on a Growth trend in the medium to long term. 

The earliest and most advanced crowdfunding market is the U.S., with Europe following closely behind, slower to embrace and implement innovations but determined to make major strides thanks to the ECSP Regulations. 

The strongest growth is in lending crowdfunding, while the growth in equity crowdfunding is weaker, which, for example, in Italy has seen a continuous decline in recent years and in Europe has remained stable.

Let us now analyze the main Emerging trends from the current crowdfunding scenario, which are an important outline for designing the future of this financial and marketing tool.

Growth in demand for alternative financial instruments

Businesses are expressing the need for greater flexibility in accessing capital and are increasingly demanding more Financing options outside the traditional financial system, more suitable for young, highly digitized companies eager to experiment with innovative business models. In general, the increasing difficulty of obtaining funds from traditional lending institutions has led to a demand for greater democratization of access to capital.

On the other hand, in turn, small investors who invest independently and are increasingly interested in alternative investment instruments are growing.

Crowdfunding is a possible answer for both of these needs, within a broader framework of alternative financial instruments and financial inclusion.

Secondary market growth

The issue of the secondary market has always been crucial and critical for crowdfunding investors, specifically for equity crowdfunding. So much so that even lawmakers have emphasized the need to work to build and make accessible a secondary market to provide a comprehensive and safe service to investors.

Platforms are slowly taking note of this need and are beginning to integrate into their portals bulletin boards for the secondary market. These also arise outside the platforms hosting the campaigns, as a service offered by third parties: in Italy it is not yet a widespread phenomenon, but internationally it is being experimented with.

This is a crucial step in removing an obstacle that generates many investors' reservations about crowdfunding.

More SMEs among the bidding companies

The profile of companies using crowdfunding is diversifying: alongside early-stage startups, the number of mature and scale-up SMEs choosing this mode to finance new product lines, expand into new markets or strengthen their image is growing.

As we saw in the recent overview of European crowdfunding, in Europe even SMEs are the first category of companies to benefit from crowdfunding. In Italy, on the other hand, crowdfunding companies are 60% startups and the remainder SMEs.

This trend stems from a growing Awareness of the benefits of diversifying funding sources and the potential of crowdfunding as a marketing tool as well as a capital raising tool.

More quality and selectivity

One sign of market maturation is the Growth in the selectivity of equity and lending crowdfunding platforms and the resulting quality of the proposed campaigns. The goal is to generate fewer campaigns but higher performance, to increase investor confidence and also achieve higher average investment tickets.

A greater Selectivity toward bidding companies results in higher barriers to entry, but stimulates greater commitment to crowdfunding, which some companies still face without the proper awareness, and most importantly generates higher quality outputs that result in concrete growth paths after crowdfunding campaigns. Indeed, one of the critical issues noted especially in equity crowdfunding is the high rate of companies that fail to pursue their growth projects after the campaign, generating disappointment and distrust among investors.

Internationalization of operations

Thanks to the so-called "European passport" introduced by the ECSP regulation, crowdfunding platforms can apply to operate throughout the European Union, and companies can To raise funds beyond the border of their individual country. This represents a concrete opportunity for export, growth or trade internationalization-oriented companies and offers both platforms and companies the opportunity to take on an international scope that is a key driver for competitiveness.

The European model of regulatory harmonization for crowdfunding, moreover, has also attracted interest in regions, such as North America and Asia, promoting reflections that move in the direction of a global crowdfunding ecosystem.

There is, of course, a long way to go, because in addition to common regulations, there needs to be an unambiguous and uniform interpretation of the regulations and a network of industry players ready to cooperate in total transparency.

Verticalisation and merger of platforms

Crowdfunding platforms face increasing competition and intensifying regulatory compliance obligations, which place a burden on budgets and internal structures.

One of the strategies for maintaining one's market and increasing one's margins is verticalization: they are emerging Specialized crowdfunding portals by sector (green, real estate, tech, agribusiness, etc.). This promotes greater attunement between project and target audience, increases collection effectiveness, strengthens platform branding and solid positioning in a specific market niche.

This verticalization is accompanied by a phenomenon that is only partly the opposite: in order to cope with competition and regulatory compliance costs, platforms are realizing that fragmentation into many small entities is not a viable path, so merger and acquisition processes are occurring. One can imagine a trend toward construction of large platforms divided internally into vertical divisions on specific economic sectors and/or specific types of crowdfunding.

In Europe, the entry into force of the ECSP Regulation forced many platforms to close down or suspend operations precisely because of their inability to comply with the new rules, and this stimulated the takeover and merger phenomenon just described, a process that is still ongoing and whose outcomes are still uncertain.

Dominant sectors: tech in the lead

I most active sectors in crowdfunding and which simultaneously achieve more success are all those based on technological innovation first and foremost.

Other dominant sectors are:

• real estate
• renewable energy
• impact investing
• healthcare
• agribusiness.

New models of financing and investment

Crowdfunding is experimenting with Forms of hybridization and integration with other forms of financing and investment and is also declining internally in new ways of raising capital.

• The U.S. model of SAFE as a highly customizable hybrid equity and lending investment vehicle, which in Italy has been assimilated mostly in the form of the Participative Financial Instruments At the regulatory level.
• Crowdfunding capital raising on blockchain networks with asset tokenization (Utility Token Offering, Security Token Offering, DAO)
• Minibonds for raising debt capital of SMEs including unlisted ones
• Hybridizations between crowdfunding and club deal and syndication models.

The future prospects of crowdfunding: predictions and directions

Standardization and concentration

European regulation has raised industry standards and is expected to serve as a model for other markets around the world. The transparency required of platforms, mandatory investor classification, and increased oversight by authorities will help build stakeholder confidence and establish standardized crowdfunding models as fully recognized financial instruments in the industry.

This will also likely result in a greater concentration of crowdfunding service provision in a few large players rather than in a constellation of small platforms like the current one.

Platform models as a service 

Crowdfunding platforms, in addition to carrying on the merger trends we have already described, will be increasingly integrated with Accelerators, incubators and investor clubs, to expand their activities and provide businesses with more and more services, accelerating the time-to-market of startups. As marketing services for individual campaigns remain excluded by law from the platforms' remit, partnerships and collaborations with marketing consulting agencies.

Synergies with traditional finance

Traditional finance players have already begun to look with interest at crowdfunding and crowdfunding service providers, so much so that acquisitions and partnerships in this direction have already begun. The expectation is that this path will continue in parallel on the tracks of acquisitions and those of integration and collaboration. Two examples are. strategic partnerships with banks for co-financing mechanisms and agreements with venture capital funds to share investment opportunities.

Not only that, crowdfunding campaigns-particularly equity-will increasingly be used as the first step in accessing more structured investment rounds, bank financing, or subsidized finance instruments. The market validation gained through crowdfunding strengthens companies' credibility and simplifies access to other sources of capital.

Integration of AI into crowdfunding

Artificial intelligence is increasingly entering and will continue to enter our daily activities, and financial activities will not be excluded. In the area of crowdfunding, the AI Will be able to be used by platforms to:

• To streamline and optimize the evaluation and due diligence processes of companies in the selection phase by leveraging algorithms for data analysis to identify the most reliable and promising companies; 
• analyze investor data to offer more personalized investment experiences and propositions;
• Automate some aspects of campaign management to reduce operational costs.

For bidding companies, on the other hand, artificial intelligence may become an indispensable tool for optimizing content creation for campaign promotion and analyzing data for targeting and predicting potential investor behavior.

But also on the other side of the fence, that of investors and market analysts, Artificial intelligence will become a predictive tool for market trends and forecasts of the most successful campaigns.

The future will see a Increasingly data-driven crowdfunding.

Integration of blockchain into crowdfunding

Blockchain technology will increasingly experience forms of integration with crowdfunding, as we analyzed in our article on blockchain for crowdfunding.

While the road to entire capital-raising campaigns based and managed on blockchain, such as IEO, IDO and DAO, is still a long one due to regulatory and operational complications, technology integration on the other hand is a prospect of the nearer future.

For example, a function of the asset tokenization that is likely to be exploited is that of ownership splitting, which allows investors to purchase small shares of high-value assets, expanding access to investments that were previously illiquid or reserved for investors with high spending power.

The smart contractsinstead, they will be able to automate the execution of arrangements, such as interest payments in loans or dividend distributions in equity, reducing administrative costs and counterparty risks.

The use of cryptocurrencies for payments and the creation of fully decentralized crowdfunding platforms, on the other hand, are held back for now by regulatory uncertainty and security risks, but they are not excluded from the prospects for the future.

Certainly the role of crowdfunding platforms as we know it now will change.

Impact investing

Interest in sustainable projects has experienced significant growth in recent years, but also severe setbacks due to institutional hesitations in supporting the ecological transition. For both these reasons, crowdfunding will be confirmed as a preferred tool to support environmental and social sustainability projects and convey business ideas with a values-based mission to intercept a sensitive and motivated audience. 

Gap between types of crowdfunding

Prospects for the future of crowdfunding see a continuation of the lending crowdfunding real estate growth and good possibilities for equity in this area as well. More uncertain, however, is the future of generalist equity crowdfunding, especially that involving startups or very small and young companies: that future will depend largely on the ability of companies to demonstrate the benefit of this type of crowdfunding raising in subsequent growth or the ability to offer more benefits to investors.

Interest rate trends and the global economic landscape have influenced and will continue to influence the fortunes of different types of crowdfunding in the future. For example, rising interest rates have made traditional investments more attractive, and global economic uncertainty has increased distrust of alternative equity-type investments, but a cut in interest rates and a stabilization of the global economy could reverse this trend.

Learn about trends and prospects for the future of crowdfunding is important to know where to look in order to follow the path of this instrument and seize all the opportunities that may arise, but it is important to stay up to date because we are talking about a fluid sector that is subject to changes that may prove unpredictable.