Capital Raising - Ethiopia | Statista Market Forecast

The country in Ethiopia is set to witness a Total Capital Raised in the Capital Raising market market reaching US$72.94m in 2024.
Traditional Capital Raising is expected to dominate the market with a projected market volume of US$72.87m in 2024.
In global comparison, the United States is anticipated to generate the most Capital Raised (US$195.4bn in 2024).
Ethiopia's Capital Raising market is witnessing a surge in private equity investments, indicating growing confidence in the country's economic prospects.

Definition:

The Capital Raising market refers to the process of raising additional capital to launch, finance, and grow a business or a project. Traditional Bank Loans are not considered in the market.

Structure:

The market consists of two segments:
- The Traditional Capital Raising market refers to traditional venture financial services for startups and emerging companies that do not yet possess a positive track record, but have exceptional growth potential.
- The Digital Capital Raising market refers to digital financial services for business customers and private borrowers.
The market data comprises of the amount of capital raised, number of deals, and average deal size.

Additional information:

Besides Traditional Bank Loans, there are various alternative forms of debt and equity financing that help businesses, especially startups and emerging companies who seek additional funds to support their business' operation and growth. Nowadays, owing to the rapid growth rate of startups and emerging companies, these financial services are more attractive and popular.
Key players in this market are companies such as Squoia Capital, Hercules Capital, and Indiegogo

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Venture Capital
Venture Debt
Digital Capital Raising

Traditional Bank Loans

The Capital Raising market in Ethiopia has been experiencing significant growth in recent years.

Customer preferences: Ethiopian investors have shown a growing interest in capital raising activities as a means to diversify their investment portfolios and generate higher returns. With limited options available in the local market, investors are increasingly looking for opportunities in the capital raising market to access a wider range of investment products and achieve their financial goals.

Trends in the market: One of the key trends in the capital raising market in Ethiopia is the increasing participation of institutional investors. As the economy continues to grow and develop, institutional investors such as pension funds and insurance companies are actively seeking investment opportunities to deploy their capital. This has led to a surge in demand for capital raising activities, including initial public offerings (IPOs) and private placements. Another trend in the market is the rise of crowdfunding platforms. These platforms have gained popularity among entrepreneurs and small businesses looking to raise capital for their projects. Crowdfunding allows individuals to invest small amounts of money in exchange for equity or other forms of ownership in the company. This has democratized the capital raising process and provided opportunities for individuals to participate in the market who may not have had access to traditional investment channels.

Local special circumstances: Ethiopia is a fast-growing economy with a young and dynamic population. The government has been implementing various economic reforms to attract foreign direct investment and promote entrepreneurship. This has created a favorable environment for capital raising activities, as both local and foreign investors are increasingly looking to tap into the country's potential. Additionally, the Ethiopian government has introduced policies to encourage the growth of the capital market, such as tax incentives for companies going public and regulatory reforms to improve transparency and investor protection.

Underlying macroeconomic factors: The growth of the capital raising market in Ethiopia can be attributed to several underlying macroeconomic factors. Firstly, the country's strong economic growth and stable political environment have attracted both local and foreign investors. This has created a conducive environment for capital raising activities, as investors are more willing to take risks and invest in new ventures. Secondly, the increasing urbanization and rising middle class in Ethiopia have created a growing demand for investment opportunities. As individuals and businesses accumulate wealth, they are looking for ways to invest and grow their capital. Finally, the government's focus on infrastructure development and industrialization has led to increased capital raising activities in sectors such as construction, manufacturing, and energy. In conclusion, the Capital Raising market in Ethiopia is experiencing significant growth due to increasing customer preferences for diversified investment options, the emergence of new trends such as institutional participation and crowdfunding, local special circumstances including favorable government policies, and underlying macroeconomic factors such as strong economic growth and rising middle class. These factors are expected to continue driving the growth of the capital raising market in Ethiopia in the coming years.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Venture capital is the term used to call the financial resources provided by investors to startup firms and small businesses that show potential for long-term growth. It has become a very important source of capital for entrepreneurs, who often have problems with financing their needs through risk-averse banks. Venture capital investments incorporate a high level of risk as only some of the VC-backed companies develop into successful and highly profitable businesses. In 2020, the leading venture capital backed company worldwide was the Manbang Group, which based in Nanjing, China.