Crowdfunding’s Untapped Potential In Emerging Markets

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Forbes | By Daniel Broderick | Aug 5, 2014

Online worldThe crowdfunding economy grew to over $5.1 billion in 2013, and thousands of entrepreneurs have already used its power and reach for launches and growth. Most of that growth came from the world’s developed economies, but crowdfunding’s true potential may lie in emerging markets. A 2013 World Bank report predicts that crowdfunding in China could reach $50 billion by 2025—and other emerging economies like Brazil may not be far behind.

A Promising Start

With 1.4 billion people and a burgeoning middle class, China represents a huge and largely untapped market for crowdfunding—but it’s unlikely to stay that way for long. While growth has been slow, crowdfunding is still a relatively new concept to the Chinese market. Demohour, the nation’s first—and now largest—platform only launched in 2011, but it’s already funded over 400 projects. Its biggest success, a campaign to create an online cartoon series, has raised more than $260,000 since its launch last August.

Other sites are now eagerly following Demohour’s lead. A host of new crowdfunding platforms such as Tmeng, Dreamore, and Emie have sprung up in recent years, each trying to carve out a niche among China’s 560 million Web users.

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Access to capital isn’t the only factor driving the growth of China’s crowdfunding ecosystem. Many—particularly the nation’s youth—are turning to crowdfunding as a means to express their views on social and political issues. Projects like a portable device that measures air quality and film about life as a gay man in Beijing have already found success on China’s crowdfunding platforms.

Meanwhile, Brazil’s crowdfunding ecosystem is already healthy and growing. The World Bank report noted that South America’s largest economy now has 17 crowdfunding platforms, including Catarse. The site bills itself as the “biggest crowdfunding community in Brazil” and has raised more than $4.1 million for over a thousand projects.

Ideame, another platform that serves Brazil—as well as Argentina, Mexico, Chile, Colombia, and Uruguay—is off to a slower but still promising start, raising US$150,000 across 86 of their most successful campaigns.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | About Crowdfunding or contact us at casano@ncfacanada.org.

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