Is Crowdfunding Slowing Down in 2025?

After a decade of strong growth, crowdfunding is slowing down, weighed down by a decline in real estate crowdfunding and an uncertain economic climate. Still, some sectors are managing to stand out.

The brief recovery seen in the second half of 2024 has proven short-lived. That’s the clear trend emerging at the start of the second half of the year for crowdfunding platforms. Despite having reached—and surpassed—the symbolic milestone of €10 billion raised since 2015, the mood around crowdfunding has soured in recent months.

Crowdfunding Declines in 2024

The drop is largely due to waning interest in real estate crowdfunding, which has seen its volume plummet to historically low levels: €294.3 million in interest-bearing loans and €1.05 billion in bonds. This decline can be traced to an increasingly bleak economic outlook and rising political instability over the past several years. “The war in Ukraine, the dissolution of the National Assembly, and ongoing fiscal and geopolitical instability all explain this unfavorable macroeconomic context,” comments Benjamin Wattinne, CEO and co-founder of SoWefund.

The downturn has affected all areas of crowdfunding—except donation-based funding. Around 160,000 projects have been financed via donations, the majority of them cultural and social initiatives. A notable example is the “Decarbonize France” campaign from the think tank The Shift Project, which raised more than €4 million on the Ulule platform.

A Crowdfunding Market in Flux

“Venture capital, which once financed growth at all costs, has shifted paradigms: the market reversal has tightened access to funding,” continues Wattinne. As a result, more and more companies that previously turned to crowdfunding to scale up now must seek alternative strategies to stay afloat. “We’re now mostly funding companies that have a clear balance between growth and profitability.”

He adds: “Investors now favor companies capable of combining measured growth with financial sustainability.” However, this market shift is also hurting digital-native vertical brands (DNVBs) and marketplaces, which have struggled to attract investment for over a year. With the market increasingly saturated and lacking innovation, new crowdfunding initiatives are finding it harder to gain traction.

What Lies Ahead for Tech?

While crowdfunding is in retreat across the sectors that once fueled its rise, it’s also opening the door for new players. Startups in artificial intelligence and defense are currently attracting strong interest. The same is true for companies in deeptech, fintech, and agritech, which have seen a surge in momentum in recent months. One example is Yacon—a company developing low-glycemic sugar alternatives—which raised nearly €3 million, including €2 million through SoWefund. That’s the largest round on the platform so far this year.

“Investment conditions are becoming stricter, and we are being more careful in our decision-making,” says Wattinne. “But this increased rigor could also indicate a gradual cleanup of the market.”

Shifts Toward Early-Stage Innovators

“The volume of applications on the platform remains stable, although total amounts raised are slightly down,” Wattinne adds. For this reason, more and more companies with JEI (Young Innovative Company) or JEIR (Young Disruptive Innovative Company) status are being favored by funds and individual investors alike. Why? These companies offer high potential returns due to their early-stage status—and they also come with tax advantages. Investors benefit from an income tax reduction equal to 30% to 50% of the amount invested, depending on the company’s classification. These businesses could form the core of crowdfunding investment strategies in the second half of the year.

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(Featured image by Micheile Henderson via Unsplash)

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First published in Maddyness. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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