PUBLISHER: Allied Market Research | PRODUCT CODE: 1641761
PUBLISHER: Allied Market Research | PRODUCT CODE: 1641761
The global revenue-based financing market size was valued at $6.4 billion in 2023, and is projected to reach $178.3 billion by 2033, growing at a CAGR of 39.4% from 2024 to 2033. Revenue-based financing (RBF) or revenue-based investing (RBI) is a financing frequently used by entrepreneurs in conjunction with angel financing. It is a method of raising capital for a business from investors. These investors then receive a percentage of gross revenues earned by the business in exchange for the money that they invested. RBF is largely used by companies such as business-to-business (B2B), SaaS companies, and technology service firms with high recurring revenue. Moreover, this category of firms with subscription-based agreements & long-term contracts largely benefit from RBF, as it requires low collateral and has consistent future revenue to borrow against
Surge in demand among investors to earn more profits from RBF and increase in need for faster & quicker fund raising than conventional banks boost the market growth. In addition, rise in adoption of revenue-based financing by a large number of start-ups & small businesses is a major factor that drives the market growth. However, absence of standardization across the globe and lack of awareness and understanding toward revenue-based financing are some of the factors that hamper the market growth. On the contrary, rise in adoption and implementation of digital platforms among start-ups and small businesses is expected to present lucrative opportunities for market growth in the coming years. In October 2023, Uncapped, formerly known as a revenue-based finance provider, secured a $216.32 million (£200 million) debt for expanding its offer to the U.S. and European entrepreneurs and businesses. The new debt financing was provided by the New York-based private equity firm Fortress Investment Group.
Segment Review
The revenue-based financing market is segmented into type, enterprise size, industry vertical, and region. By type, it is classified into variable collection and flat fee. By enterprise size, it is divided into large enterprise and small & medium enterprise. By industry vertical, it is segregated into BFSI, IT & telecom, healthcare, media & entertainment, consumer goods, energy & utilities, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Key Findings of the Study
By type, the variable collection segment accounted for the largest revenue-based financing market share in 2023.
By enterprise size, the small and medium-sized enterprises segment accounted for the largest revenue-based financing market share in 2023.
By industry vertical, the IT and telecom segment accounted for the largest revenue-based financing market share in 2023.
Region wise, North America generated the highest revenue in 2023.
The market players operating in the revenue-based financing market include Capchase, Lighter Capital, Clear Finance Technology Corporation, Karmen SAS, Wayflyer, Re:cap Technologies GmbH, Liberis, Outfund, Viceversa, and Flow Capital Corp. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, which help drive the growth of the revenue-based financing market globally.
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