2,790 crowdsourcing and crowdfunding sites
In the last year alone over 65 crowdfunding platforms have been founded in more than 18 different countries around the world. From the Netherlands to the Philippines and from Romania to Canada, the crowdfunding phenomenon is strengthening its position as a globally disruptive force which challenges modes of traditional capital allocation. However, it is the rise of creatively-based crowdfunding platforms that has been truly meteoric. Of the 65 plus new sites launched this year an overwhelming 80% are focused on creative and artistic projects.
In this series of three short editorials on crowdfunding data, we dig deeper into the numbers on structures and ecosystems of crowdfunding platforms and discuss the perspectives accompanying these numbers.
Disruptive in both the public and private spheres, and a game-changer for individuals looking for funding, crowdfunding engages the crowd in order to break-down barriers to traditional financing. Against the backdrop of this evolving collaborative ecosystem it is important to understand the development of these new and innovative resource allocation models.
Who would have thought five years ago that people would be routinely using social media to rustle up $5,000 or $20,000 or even $100,000 to fund their personal creative projects? What began as a way to contribute a couple of hundred dollars to help fund your local band’s album, is now stimulating collective imagination across the globe and being integrated as part of a financial ecosystem, driven by the people, which is designed to bypass traditional institutions in the allocation of resources.
Initial growth amongst crowdfunding sites was strongly focused in the philanthropic sector. In fact over half of all socially-based sites were founded before 2010. However, although new sites with this focus have continued to be founded over the last two years, their number and rate of expansion has been dwarfed by the sudden explosion of platforms supporting creative projects. Of all creative platforms online today, an overwhelming 75% were founded in the last two years. Dominating the current crowdfunding landscape these creative platforms now account for half of all platforms active globally.
Spurred on by the dynamic growth of pioneering creative platforms Kickstarter and IndieGoGo, which have brought the opportunities presented by collaborative funding to the forefront, crowdfunding is now a rapidly evolving phenomenon.
The recent popularisation of the crowdfunding model by creative innovators is in part due to the fact that projects in this area lend themselves particularly well to portrayal using the wealth of digital media available today. In addition, a crucial psychological hook is the fact that the realisation of final creative projects is tangible and crowdfunders can participate in and enjoy the results of their collective contributions.
Yet it is not only in the creative sphere we have seen a recent surge in numbers of crowdfunders; a mutually beneficial relationship has also begun to flourish between science and crowdfunding. Although not yet as established as crowdfunding for the arts, there is a strong practical driving force behind the switch in financial ecosystem for scientists, which is that in this current era of fiscal austerity many countries are severely cutting their research budgets.
Crowdfunding represents an emerging channel through which scientific communities can engage with the general public to generate sufficient revenue for getting their open-source science projects off the ground. Participation in these projects depends upon the ability to allocate tasks and breakdown large fixed costs among project participants, thus allowing the ‘collective hand’ to modularise funds and redistribute labour more efficiently. These initiatives aim to leverage this exciting new model as opposed to relying on government grants or private investment.
Right now creatively-based projects dominate the crowdfunding space. Yet as we continue to see diversification within these innovative models and tools, more and more sectors strive to source and access funding in an innovative and open-source manner. As the concept of crowdfunding gains even greater traction, and the rapidly changing communications architecture continues to boost exponential growth within online communities, the speed and breadth at which this collaborative ecosystem continues to evolve can only increase and mature. The transformative and not yet fully known impact of crowdfunding in all sectors is both exciting and extremely significant. Crowdfunding is currently an ecosystem under intense evolution.