Crowdfunding represents a collaborative endeavor where individuals, corporations, and NGOs join forces to collectively finance personal, societal, or business initiatives. Crowdfunding bears a resemblance to traditional concepts like charity or social support; still, it distinguishes itself by aiming for returns, whether monetary or intangible. In contemporary times, crowdfunding is closely linked to the internet and leverages social media for fundraising purposes. This article explores three prominent crowdfunding platforms in the Indian fintech market — Milaap, Ketto, and CrowdEra, delving into their operations and areas of focus. The foundation of the study was built on the analysis of primary data, obtained from 50 expert project owners on each platform. The study integrated quantitative metrics like funding target, total funds raised, project nature, funding model, and success rate, along with qualitative dimensions, exploring technological innovations and regulatory compliance. Based on its analysis, the study observed that these platforms not only support business ventures but also contribute to social causes. Despite its considerable potential, crowdfunding in India is still in its early stages. Consequently, lawmakers need to review existing regulations and establish a robust support system to nurture this burgeoning market. Crowdfunding platforms serve as crucial support networks for both those seeking funds and those providing them, playing a pivotal role in closing the funding gap. Looking ahead, these platforms must enhance their capabilities to seamlessly integrate into mainstream funding channels, underscoring the evolving role of crowdfunding in shaping the financial landscape.

Theoretical Overview of Crowdfunding Models

Crowdfunding is a financial model that leverages the collective efforts of a large number of individuals, typically via online platforms, to raise funds for a specific project, venture, or cause (Usha et al., 2022). It represents a departure from traditional financing methods, where capital is typically obtained from banks, venture capitalists, or other institutional investors. Instead, crowdfunding allows individuals, or “the crowd”, to contribute small amounts of money, cumulatively forming a substantial pool of funds to support diverse initiatives.

Crowdfunding holds multifaceted significance. Firstly, it democratizes capital access, enabling entrepreneurs and innovators, often overlooked by traditional funding sources, to secure financial support (Baber, 2019). It also broadens investment opportunities, providing both large and small investors with a diverse range of projects to support, aligning with their interests or values. Moreover, crowdfunding acts as a market validation tool, gauging the viability of ideas through successful campaigns that demonstrate market demand and attract additional funding or partnerships. Additionally, it fosters community engagement as backers become advocates, forming a supportive network beyond financial contributions (Sharma et al., 2019). Lastly, the diversity of funding models, including reward-based, equity-based, debt-based, and donation-based crowdfunding, accommodates varied project types and funding needs, enhancing the flexibility and inclusivity of the fundraising landscape (Usha et al., 2022).

Donation-Based Crowdfunding: Individuals contribute funds without expecting financial returns or equity. Donations are typically motivated by a desire to support charitable or social initiatives (Usha et al., 2022). It allows individuals to raise funds for personal or community-oriented projects (Akalya, 2019).

Reward-Based Crowdfunding: Backers contribute funds in exchange for non-monetary rewards or perks related to the project, such as the product being developed or exclusive experiences. Popular for creative projects, product launches, and artistic endeavors, this model engages backers by offering tangible or intangible incentives (Sharma et al., 2019).

Equity-Based Crowdfunding: Investors receive equity or ownership stakes in the project or company in exchange for their financial support (Akalya, 2019). Particularly relevant for startups and small businesses, equity-based crowdfunding allows individuals to become shareholders and participate in the project's success (Usha et al., 2022).

Debt-Based Crowdfunding (Peer-to-Peer Lending): Backers provide loans to the project or business, and the borrower agrees to repay the amount over time with interest. Ideal for businesses seeking financing without diluting ownership, debt-based crowdfunding offers a way to access capital while providing investors with a return on their investment (Akalya, 2019).

The research study employed a meticulous approach to comprehensively analyze the three prominent crowdfunding platforms (Milaap, Ketto, and CrowdEra) in the Indian fintech market. The strategic selection of these platforms was based on key factors such as platform's scope, marketing strategies, business model, imposed charges, fundraising constraints, total project count, cumulative funds raised, and success rate.This selection aimed to provide insights into the entire spectrum of the crowdfunding landscape, ensuring a holistic understanding of the diverse platforms operating in the Indian fintech market.

The foundation of the study was built on the analysis of primary data collected from 150 expert project owners who had successfully launched crowdfunding campaigns on three platforms, with a random selection of 50 project owners from each platform, encompassing key metrics characterizing the respective crowdfunding platforms. The study focused on both quantitative and qualitative dimensionsof data collection. Quantitative data extraction focused on essential metrics such as funding target, total funds raised, nature of the project, funding model, and success rate, while the qualitative data collection process delved into platform-specific metrics, such as technological innovations and regulatory compliance.

The integration of both quantitative and qualitative data aimed to offer a nuanced understanding that extended beyond numerical measures,enriching the depth of the analysis and providing a comprehensive view of the crowdfunding ecosystem in the Indian fintech market. Ethical considerations were paramount throughout the research, with a commitment to maintaining the confidentiality and anonymity of the analyzed crowdfunding platforms. The study exclusively relied on the information provided by the participating project owners. The study acknowledges inherent limitations, including potential biases in the responses of the project owners and the dynamic nature of the fintech landscape.

Following the predetermined objectives of the study, an analysis was conducted on the three crowdfunding platforms using a defined set of criteria. The following table effectively summarizes the entire spectrum of these crowdfunding platforms.

Table 1 – Analysis of Crowdfunding Platforms based on defined set of criteria

The above table provides a concise overview of the distinct characteristics and performance metrics of the identified three crowdfunding platforms, facilitating a comparative analysis of their strengths and areas of focus. Milaap caters to diverse causes like disaster relief, healthcare, education, and sports, and employs cause-based marketing (Sajjan &Venkatesha, 2018). Ketto engages with NGOs and corporate and personal causes, operating both domestically and internationally, and focuses mainly on marathon campaigns for fundraising (Lakshita et al., 2019). Crowdera uses social outreach and online tactics and focuses on NGOs and startups with a global reach. All three platforms operate on a social and creative business model, with Crowdera additionally incorporating a tech and startup focus. Milaap and Crowdera have no minimum fundraising constraints, while Ketto imposes a minimum of Rs. 1000. Milaap has supported over 2.9 lakh projects, raising over Rs. 2300 crore with a 78% success rate. Ketto has facilitated 2.5 lakh projects, raising over Rs. 1800 crore with a 72% success rate. Crowdera has been involved in 1.6 lakh projects, raising over Rs. 1400 crore with a 70% success rate, showcasing their unique profiles and achievements in the crowdfunding landscape.

Furthermore, based on the data collected, 50 projects (campaigns) were assessed for each crowdfunding platforms to investigate the primary aspects of the intricacies of technological innovations and emerging trends. The resulting comprehensive campaign patterns categorized by specific areas are illustrated in the following three charts:

Fig.1 – Focus Areas of MILAAP

Fig.2 – Focus Areas of KETTO

Fig.3 – Focus Areas of CROWDERA

The above charts present a detailed breakdown of the various campaigns supported by the Milaap, Ketto, and Crowdera platforms, offering valuable insights into the diverse focus areas of these crowdfunding platforms, spanning social causes, entrepreneurship, technology, and other sectors.The study of Lakshita et al. (2019) similarly observed that entrepreneurship and social causes are given higher importance by crowdfunding platforms, which is a good sign for the overall development of an economy.

Crowdfunding, often referred to as “democratic finance”, represents a departure from traditional financial structures by bypassing traditional banking intermediaries (Lakshita et al., 2019). Despite its immense potential, crowdfunding is currently in its early stages of development. Therefore, it becomes imperative for legislators to scrutinize existing regulations and establish a robust support system for this burgeoning market. Notably, crowdfunding serves as a critical avenue for capital accumulation, particularly benefiting small and medium-scale businesses that often face challenges with traditional financial entities like banks (Vyas et al., 2023). Crowdfunding platforms emerge as crucial support systems for both fund seekers and providers, playing a pivotal role in bridging the funding gap. Moving forward, these platforms need to enhance their competency to seamlessly integrate into mainstream funding avenues, underlining the evolving role of crowdfunding in shaping the financial landscape.

The concept of crowdfunding holds considerable idealistic potential, especially if embraced by a widespread audience. The present research was undertaken to explore the operational possibilities of crowdfunding platforms in India, utilizing a specific set of parameters and campaigns. However, the scope for future research remains expansive, as it can extend to the examination of international crowdfunding platforms. Such an analysis could involve a more extensive array of parameters and campaigns, offering a broader perspective on the global landscape of crowdfunding. This research lays the foundation for potential follow-up studies that could delve deeper into the nuances of crowdfunding on a global scale, providing a more comprehensive understanding of its dynamics and impact across diverse markets.

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8. www.gocrowdera.com/

9. www.ketto.org/

10. www.milaap.org/