Capital Raising - South Africa | Statista Market Forecast

The country in South Africa is projected to see a Total Capital Raised in the Capital Raising market market reaching US$522.80m in 2024.
Traditional Capital Raising is set to dominate the market with a projected market volume of US$453.20m in 2024.
In global comparison, the United States is expected to generate the most Capital Raised, with US$195.4bn in 2024.
In South Africa, the Capital Raising market is seeing a surge in demand for innovative fintech startups seeking venture capital investment.

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 South Africa has been experiencing significant growth in recent years, driven by various factors such as customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Customer preferences in South Africa have been shifting towards alternative forms of capital raising, such as crowdfunding and peer-to-peer lending.

This can be attributed to the increasing popularity of digital platforms and the ease of access they provide to both investors and entrepreneurs. Additionally, customers are becoming more conscious of the social and environmental impact of their investments, leading to a rise in demand for socially responsible capital raising options. Trends in the market indicate a growing interest in venture capital and private equity investments in South Africa.

This can be attributed to the country's vibrant entrepreneurial ecosystem and the potential for high returns on investment. Start-ups and small businesses are increasingly turning to venture capital and private equity firms for funding, as these investors offer not only capital but also expertise and networks that can help drive growth. Local special circumstances in South Africa, such as the government's focus on promoting entrepreneurship and innovation, have also contributed to the development of the capital raising market.

The South African government has implemented various initiatives and programs to support small and medium-sized enterprises, including providing tax incentives and creating funding platforms. These efforts have created a conducive environment for entrepreneurs and investors, leading to increased capital raising activities. Underlying macroeconomic factors have played a significant role in the growth of the capital raising market in South Africa.

The country's stable economic growth, favorable regulatory environment, and strong investor confidence have attracted both local and international investors. Additionally, South Africa's strategic location as a gateway to the African continent has made it an attractive destination for investors looking to tap into the region's emerging markets. In conclusion, the Capital Raising market in South Africa is developing rapidly due to customer preferences for alternative forms of capital raising, trends in venture capital and private equity investments, local special circumstances that support entrepreneurship, and favorable macroeconomic factors.

As the market continues to evolve, it is expected to further expand and diversify, providing new opportunities for both investors and entrepreneurs.

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.