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Crowdfunding raises $2.7 billion worldwide in 2012

The fairly new way for people to invest in projects and ideas is increasingly more popular. The crowdfunding market nearly doubled last year -- funding more than 1 million campaigns.


In the tech world, crowdfunding is most associated with Kickstarter and raising money for technology-centered projects like the Ouya gaming console, the Elevation Dock, and the Pebble smartwatch. But, the concept has a far wider reach than just consumer devices.

Global crowdfunding raised nearly $2.7 billion for more than 1 million campaigns in 2012, according to a new report by Massolution. This means that the crowdfunding market grew by 81 percent over the year prior.

"While lending-, donation-, and reward-based crowdfunding have thus far been leading this global financial revolution," CEO of Massolution Carl Esposti said in a statement, "equity-based crowdfunding is about to take center stage in the U.S."

Numbers generated by Massolution, based on data collection from 308 active crowdfunding platforms worldwide, show that 27.4 percent of crowdfunding money went to social causes. Coming in second place was business and entrepreneurship with 16.9 percent, followed by films and performing arts with 11.9 percent. Also making the top 10 crowdfunding list were, music, the environment, fashion, and art.

When President Barack Obama signed the JOBS Act last year, he basically made crowdfunding legal in the U.S. Although the law won't go into effect until the end of 2013, dozens of crowdfunding startups are readying to launch. For instance, sites like Crowdfunder and Wefunder already have thousands of users that have pledged millions in investment.

In 2012, North America and Europe were the two regions that most invested in crowdfunding --accounting for 95 percent of the total market, according to Massolution. North America raised $1.6 billion, while Europe pulled in $945 million.

Massolution forecasts that these numbers will just keep on growing in the year to come. "Consistent with our 2012 forecast, total crowdfunding volume nearly doubled last year, and with regulatory bodies continuing to pave the way, we expect global crowdfunding volumes to exceed $5 billion in 2013," Esposti said.