Market Insights Financial Capital Raising

Traditional Capital Raising - Africa

Africa

The country in Africa is expected to reach a Total Capital Raised of US$3.84bn in the Traditional Capital Raising market market by 2024.
Within this market, Venture Capital is set to lead with a projected market volume of US$3.77bn in 2024.
When compared globally, the United States is anticipated to generate the highest amount of Capital Raised, amounting to US$159,000.0m in 2024.
In Africa, traditional capital raising methods like private placements and rights issues remain popular among businesses seeking funding for expansion.

Key regions: Israel, Brazil, United States, Europe, United Kingdom

Market

Region

Region comparison

Currency

Analyst Opinion

The Traditional Capital Raising market in Africa is experiencing significant growth and development.

Customer preferences: In recent years, African entrepreneurs and businesses have shown a growing preference for traditional capital raising methods. This is primarily due to the limited access to formal banking services and the lack of venture capital and private equity investments in many African countries. Entrepreneurs are turning to traditional methods such as bank loans, personal savings, and family and friends for funding their businesses. This preference is driven by the need for immediate capital and the familiarity and trust associated with these traditional methods.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Africa is the increasing use of microfinance institutions. These institutions provide small loans to entrepreneurs and businesses that may not have access to traditional banking services. The rise of mobile money platforms has also facilitated the growth of microfinance in Africa, making it easier for individuals to access and repay loans. Another trend in the market is the emergence of crowdfunding platforms. These platforms allow entrepreneurs to raise capital from a large number of individuals, often through small contributions. Crowdfunding has gained popularity in Africa due to its ability to reach a wider audience and tap into the diaspora community, which is often willing to support businesses in their home countries.

Local special circumstances: Africa is a diverse continent with varying levels of economic development and infrastructure. In some countries, the lack of a well-developed banking system and limited access to formal financial services make traditional capital raising methods the only viable option. Additionally, cultural norms and traditions play a significant role in shaping customer preferences. In many African societies, there is a strong sense of community and reliance on family and friends for support, making personal savings and informal loans a common practice.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Africa is also influenced by macroeconomic factors such as economic growth, inflation rates, and government policies. Countries with stable and growing economies are more likely to attract investments and have a thriving capital raising market. Additionally, government policies that promote entrepreneurship and provide incentives for businesses to access capital can contribute to the growth of the market. In conclusion, the Traditional Capital Raising market in Africa is experiencing growth and development driven by customer preferences, local special circumstances, and underlying macroeconomic factors. Entrepreneurs and businesses in Africa are increasingly turning to traditional methods such as bank loans and personal savings for funding their ventures. The rise of microfinance institutions and crowdfunding platforms further contribute to the growth of the market. However, it is important to note that the market is diverse, with different countries and regions experiencing unique circumstances and trends.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average 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), and 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. The scenario analysis is based on a Monte Carlo simulation approach generating a range of possible outcomes by creating random variations in forecasted data points, based on assumptions about potential fluctuations in future values. By running numerous simulated scenarios, the model provides an estimated distribution of results, allowing for an analysis of likely ranges and confidence intervals around the forecast.

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.