Crowdfunding Nearly Tripled Last Year, Becoming a $16 Billion Industry

The pace of crowdfunding growth has only been accelerating, according to a new report on the global industry.

learn more about Catherine Clifford

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

If crowdfunding's been hot for awhile, last year, it was damn near on fire.

In 2014, companies and individuals across the globe raised $16.2 billion through crowdfunding, according to a report released today by industry research firm Massolution. That's a 167-percent increase from 2013, when $6.1 billion was raised.

On the heels of a record year, crowdfunding is projected to lap itself again. This year, the industry is expected to generate $34.4 billion, according to the report.

Related: Food-Tech Startup Dinner Lab Is Crowdfunding a Cool $2 Million -- From Its Customers

Looking at all of crowdfunding is like trying to figure out how to hug an octopus -- there are currently 1,250 active crowdfunding platforms, none of which is even close to holding a monopoly. Kickstarter, arguably the household "Kleenex brand" of crowdfunding platforms, has recently been usurped by personal campaign platform GoFundMe, according to the report. San Diego-based GoFundMe raised $470 million from 6 million donors in 2014, while Brooklyn, N.Y.-based Kickstarter raised $444 million last year from 3.3 million donors.

Even while crowdfunding is an entrepreneur's hustle, it's attracting the attention of big corporate giants lately -- but for reasons that go beyond the money-raising aspect.

Related: Déjà Vu 2012: A Zombie-Frankenstein JOBS Act 2.0 Is in the Works

"Large enterprises are now pursuing a crowdfunding agenda to market-test innovation portfolios and validate R&D outputs," Carl Espoti, the CEO and founder of Massolution and Crowdsourcing.org, writes in the report. "Our observations point to major global companies seeing models as a digital incubators to encourage new ideas, intellectual ideas and human capital, as well as to form meaningful customer relationships."

While crowdfunding is used for everything from investing in real estate to supporting musicians, the largest portion of the funds generated last year was used for launching businesses. Check out this chart, which shows the sectors that received the most funding via crowdfunding both last year and two years ago:

Click to Enlarge+
crowdfunding graphic

Related: For This Cat Cafe, Crowdfunding With Kickstarter 'Was Never About the Money'

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Business News

This OnlyFans Star Was Once Part of a Fanatical MLM Cult. "I Was Forced Into Celibacy."

Cami Strella was lured into a multilevel marketing scheme but escaped to start her own six-figure-a-month business.

Living

Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.

Growing a Business

7 Marketing Strategies to Accelerate Your Business

These strategies will help you win and position yourself and your company in the best way this year.

Marketing

5 Reasons Why Your Brand Needs a Strong Social Media Presence

Social media has replaced traditional media, so it's time to funnel your marketing budget into a better, more reliable strategy