5 Most Popular Crowdfunding Industries
With the growth of crowdfunding in popularity, the number of industries that raise money from the crowd is growing, too.
Among them, there are sectors that have a higher success rate, but there are also industries that aren’t performing as well. If you’re a crowdfunding platform owner or looking to start one, it’s good to keep an eye on the top crowdfunding industries and market to those specific sectors to boost your performance.
Obviously, the projects that get financed the most are the ones that have a clear monetization strategy, have a sustainable revenue source or found ways to build an audience. But the niches promoted by crowdfunding platforms may cause some controversy because these may not be the industries that are “richest”, but actually the “poorest” and need money most.
The most popular sectors hosted by some of the leaders in the crowdfunding industry are shown in the table below.
|StartEngine||Banking and investment, Media and entertainment, Food & beverage, Real estate, Transportation|
|CrowdCube||Food & beverage, Fintech, Consumer goods, Consumer internet|
|Kickstarter||Arts, Comics & Illustration, Design, Tech, Film, Food & Craft, Games, Music, Publishing|
As you can see, the main crowdfunding industries covered by StartEngine and Kickstarter which are US-based, and CrowdCube which is UK-based coincide in many cases.
While StartEngine and CrowdCube don’t display the number of projects whose funding was canceled or unsuccessful, Kickstarter does. Based on the Kickstarter crowdfunding success rate, we can make some conclusions about the most and the least promising industries where one can raise funds from the crowd:
|Comics & Illustration||64%|
|Film & video||38%|
Even though the mentioned industries are indicated in the main menu of the Kickstart crowdfunding platform and, most likely, are among the top industries, the success rate varies greatly.
For example, StartEngine in their 2020 report said that their top-performer crowdfunding industry was Food & Beverage, however, in the Kickstarter table of success rates, Food is almost at the very bottom.
It’s better to think of these industries as relative to a particular crowdfunding platform, rather than the “ultimate truth”.
Still, these are the crowdfunding industries that overlap the most, so it’s worth saying a couple of words about them.
What you will learn in this post:
Food & Craft
This crowdfunding industry attracts small local businesses such as restaurants, cafeterias, artisan workshops, and similar. People always want to eat, so there’s always enough space for another food shop or restaurant. Local food & beverage businesses always find creative ways to market their products, so they are quite popular on crowdfunding platforms.
Another factor that boosts the popularity of such projects is a tangible result. Investors want to see what comes out from the invested funds. In the case of fundraising for a restaurant or a coffee shop, any investor can just pass by to check what is going on at the place. Tangibility also impacts the aims for which funds are raised.
Normally, fundraising campaigns in this industry are organized to open a new location, to buy equipment, to renovate an existing space — something that can be seen.
Investors prefer giving funds to local businesses not only for future profit but for advertisement purposes because investing in the development of the local economy is becoming increasingly popular.
Film & Video
Movies and TV series are the most popular destinations for crowdfunding. That’s why not only general-purpose crowdinvesting platforms such as StartEngine or Kickstarter host such projects but there are crowdinvesting websites dedicated to this industry only such as Seed&Spark.
If you opt for launching a crowdfunding platform for filmmakers, you need to consider several details.
For fundraisers, a reward-based platform is more preferable than an equity-based platform. It enables them to give investors predetermined rewards.
The filmmaking process is very complex and consists of several stages which shall be considered by the development of a platform. For a platform, it is more reasonable to provide filmmakers with an opportunity to raise funds at all stages of the filmmaking process. It ensures ongoing support to the project and boosts the success rate.
Art & Comics
Crowdfunding for art projects is one of the most popular industries mentioned on Kickstarter.
It can be more complicated to attract new investors to fund art because it is difficult to access potential risks and profits.
That’s why reward-based models where artists can compensate their backers with a disk, a mention in a Thank You video, or with any other predetermined reward, are more common than other models.
For the same reasons, art projects are mostly backed by the artist’s fans or people inspired by a project rather than investors looking for a profit in the future.
There is a special reason why Comics are in a separate category on Kickstarter. According to the director of publishing & comics outreach at Kickstarter, Oriana Leckert, the comics campaigns on the platform have raised over $5,5 mln in the first quarter of 2022, and the trend continues. For six years running, this category stays among the top categories with the highest success rate.
Backers that support a comics project are usually given a unique reward or can opt to pledge the project without expecting anything in return. For this reason, comics projects rely mostly on retail investors.
The gaming market is valued at $180 bln compared to $51 bln in the film industry. Crowdfunding for games has been a huge part of the 21st century because triple A games are more like hollywood movies but provide you the ability to interact with characters.
However, it’s about the indie game developers that are usually fundraising. A well-thought project that isn’t another Minecraft clone or rogue-like project has decent chances of hitting that funding goal.
Along with standard criteria such as a team behind the game, a clear roadmap, etc., platform managers check how developers are going to monetize games to pay their investors. The more proven ways the project is going to use for monetization, the higher are the chances that it will succeed and its investors will get their share of the revenue.
Speaking of technology, it’s very diverse now, from electric scooters to drones and solar panels. It’s about knowing what kind of tech to cover and market to.
With the Environmental Social and Governance programs developing very quickly, the green tech is definitely gonna be in the spot.
According to the Kickstarter table that we’ve gathered, the tech industry is at the very bottom of successful projects. It’s very likely that this particular industry attracts crazy innovation or doesn’t have a proper monetization strategy in place. In addition, dropping an “eco-friendly” tag on some tech doesn’t make it successful immediately.
What crowdfunding industry should you choose for your platform
If you’re a fan of niche crowdfunding, then you should definitely focus on a segment in which you can easily outperform other platforms like Harvest Returns, FarmFundr, Charm Impact or other platforms with a specific aim.
And if you have the skill and resources to launch and support a versatile crowdfunding platform like Kickstarter, StartEngine or CrowdCube, then you should master customer acquisition and attract both investors and startups.
Regardless of the industry, you’ll definitely need a crowdfunding CRM or fully-scalable crowdfunding platform software to rely on.
Check out the LenderKit white label crowdfunding software to minimize the time to launch your platform and start hosting crowdinvesting campaigns.
The solutions can be customized to fit your industry, regulations, and comply with your business needs. They come with an extensive set of out-of-the-box features that enable you to launch crowdinvesting activities right away.
And if you need some custom crowdfunding platform development, our team has launched over a dozen platforms now, so we have what it takes to build your perfect crowdfunding tool.