Alternative Finance Market Report 2024

The alternative finance market size has grown exponentially in recent years. It will grow from $216.08 billion in 2023 to $260.65 billion in 2024 at a compound annual growth rate (CAGR) of 20.6%. The growth observed in the historic period can be attributed to several factors, the proliferation of online platforms and social media, growing adoption of peer-to-peer lending, increased utilization of cryptocurrency and blockchain technology, rising interest in sustainability and green finance initiatives, and the emergence of embedded finance solutions.

The alternative finance market size is expected to see exponential growth in the next few years. It will grow to $559.92 billion in 2028 at a compound annual growth rate (CAGR) of 21.1%. In the forecast period, growth can be attributed to several factors, the increasing presence of technology-driven lenders, expanding adoption of decentralized finance (DeFi), greater application of artificial intelligence (AI), rising popularity of initial coin offerings (ICOs), and increasing activities in microfinance. Key trends expected in this period include advancements in technology, the integration of AI and data analytics, increased adoption of Internet-of-Things (IoT) technologies, and the emergence of blockchain-based platforms for alternative lending.

The growth of the alternative finance market is expected to be driven by the increasing number of small and medium-sized businesses (SMBs). SMBs are defined by specific criteria related to their size in terms of employees, annual revenue, or assets. The rise in SMBs can be attributed to various factors, including crowdfunding, peer-to-peer lending, tax advantages, and business development initiatives. Alternative finance plays a crucial role for SMBs by offering diverse funding options that are more accessible compared to traditional financing methods. This helps address the limitations often encountered with conventional financing.

Leading companies in the alternative finance sector are actively innovating with technologies such as alternative financing platforms to maintain their competitive edge. These platforms are digital tools that enable individuals and businesses to raise capital through methods such as crowdfunding, peer-to-peer lending, invoice financing, and equity crowdfunding, bypassing traditional banking routes. For example, Copernicus Group introduced its alternative financing platform, Copernicus Credit, in July 2021. This platform offers a range of financial services including crowdfunding and peer-to-peer lending, providing streamlined processes that connect fundraisers directly with potential investors or lenders. The platform emphasizes user-friendly interfaces and robust security measures to ensure safe and efficient transactions.

In March 2024, Levenue B.V., a Netherlands-based financial services company, acquired MidFunder AG to strengthen its market presence in Switzerland. This strategic move leverages MidFunder's established customer base and technological capabilities in the alternative financing sector.

Major companies operating in the alternative finance market are PayPal Holdings Inc., Rocket Mortgage, Bread Financial Holdings, Coinbase Global Inc., Social Finance Inc., Affirm Inc., LendingClub Corporation, OnDeck Capital Inc., Fiverr International Ltd., Betterment Holdings Inc., Funding Circle Holdings plc, Prosper Marketplace Inc., RateSetter, Wealthfront Corporation, OurCrowd Ltd., Freelancer Technology Pty Limited, FundingKnight, Indiegogo Inc., Landbay Partners Limited, Assetz Capital, Kiva Microfunds, Kickstarter PBC.

North America was the largest region in the alternative finance market in 2023. The regions covered in the alternative finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the alternative finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Alternative finance refers to a range of financial channels and instruments that have emerged outside the conventional financial system. It encompasses various innovative funding options available to both individuals and businesses, offering alternatives to traditional banking, stock markets, and conventional investment avenues. This sector provides more accessible, flexible, and diverse funding choices, particularly advantageous for startups, small businesses, and individuals who may encounter obstacles in obtaining finance through traditional routes.

Key types of alternative finance include peer-to-peer lending, crowdfunding, invoice trading, and other methods. Peer-to-peer lending allows individuals or businesses to borrow money directly from other individuals or investors, bypassing traditional financial institutions. These platforms operate through various business models, including traditional lending and alternative marketplace lending, catering to a wide range of users, from enterprises to individual borrowers.

The alternative finance market research report is one of a series of new reports that provides alternative finance market statistics, including alternative finance industry global market size, regional shares, competitors with an alternative finance market share, detailed alternative finance market segments, market trends, and opportunities, and any further data you may need to thrive in the alternative finance industry. This alternative finance research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The alternative finance market includes revenues earned by entities by providing services such as equity crowdfunding, debt crowdfunding, revenue-based financing, and online microfinance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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