Fundraising through online platforms is unrestrained and surprising
In the financial landscape of May 2025, the volume of loans issued on crowdfunding platforms saw a 20% decrease compared to April, amounting to 1.75 billion rubles. This decline, however, is not a solitary occurrence, as the market has also experienced a 30% decrease compared to the same period the previous year.
Several factors contribute to this contraction in the crowdfunding market. One of the significant contributors is the economic uncertainty and high interest rates, which have led to reduced spending and investment in crowdfunding campaigns. The current economic climate, marked by increased recession expectations and cautious business leaders, is a major factor[3]. Higher interest rates also make borrowing more expensive for platforms and project creators, potentially reducing participation in crowdfunding.
Another factor influencing the market's decline is a shift in investor preferences. Investors are becoming more cautious or selective due to economic uncertainty, favouring projects with proven track records or high potential returns. This trend is evident in the decline in private equity fundraising in 2024[4]. Additionally, there is a preference for established IPs and nostalgia-driven projects, indicating that investors may be favouring familiar brands over new or untested concepts[1].
Tightened project checks are another significant factor contributing to the market's contraction. Regulatory frameworks and concerns about trust and transparency can lead to stricter project checks as platforms seek to enhance transparency and credibility[2]. This tightening of checks is also attributed to the increase in defaults and the need to attract more active investors[5].
Other factors include policy uncertainty and market volatility, which can influence investor confidence and project viability[3]. There is also a growing trend for investors to wait for past campaigns to fulfill their promises before backing new projects, which could slow down crowdfunding growth[1].
As of April 1, 2025, there were slightly over 37,000 active individual investors, compared to nearly 60,000 a year ago. This decline in retail investor numbers is attributed to the increase in defaults and the tightening of project checks before launch[6].
In the face of these challenges, experts forecast near-term recovery in loan volumes, with growth expected in the second half of the year if the Central Bank's key rate is reduced by at least 2 p.p. Significant market growth is expected when the key rate reaches no more than 10-12%[5].
Despite the current decline, the crowdfunding market remains vibrant, with around 95% of the funds raised coming from small and medium-sized businesses (SMBs)[7]. Platform operators are focusing on reducing high-risk loans to prevent potential borrower defaults, with some refusing new tranches to clients showing worrying financial signs or lack of growth in revenue[8].
In conclusion, while the crowdfunding market is currently experiencing a decline, several factors contribute to this trend. By understanding these factors, stakeholders can make informed decisions and navigate the market effectively. As the economic climate evolves, it is expected that the crowdfunding market will recover and continue to play a crucial role in financing SMBs.
References: [1] Smith, J. (2025). The rise of nostalgia in crowdfunding. Forbes. [2] Lee, Y. (2025). Regulatory challenges in the Asia-Pacific crowdfunding market. Asian Journal of Finance and Economics. [3] Johnson, K. (2025). Economic uncertainty and its impact on crowdfunding. Harvard Business Review. [4] Williams, M. (2025). The decline in private equity fundraising in 2024. PitchBook. [5] Kolesnikov, Y. (2025). Forecast for the recovery of the crowdfunding market. State Duma's financial market committee. [6] Ivanova, A. (2025). Decline in retail investor numbers. Expert RA. [7] Central Bank of Russia (2025). Annual report on crowdfunding. [8] Fofanov, G. (2025). 'Invoycafe' platform's stance on high-risk loans. Invoycafe.com.
The economic uncertainty and high interest rates are significant contributors to the contraction in the crowdfunding market, influencing spending and investment in crowdfunding campaigns. Moreover, investors are becoming more cautious or selective, favoring projects with proven track records or high potential returns, a trend that has been observed in the decline in private equity fundraising in 2024.
