Traditional Capital Raising - Argentina

Argentina is projected to reach a Total Capital Raised of US$715.40m in the Traditional Capital Raising market market by 2024.
The market in Argentina is expected to be dominated by Venture Capital, with a projected market volume of US$698.40m in 2024.
When compared globally, the United States is forecasted to generate the most Capital Raised, amounting to US$159.0bn in 2024.
In Argentina, traditional capital raising methods like IPOs are gaining traction in the capital raising market amid economic reforms and increasing investor confidence.

Definition:

The Traditional Capital Raising market relates to venture investment in startups and emerging companies that are not yet generating positive or significant revenue but have high growth potential. The capital is mostly raised from venture financial institutions, and minorly from banks.

Structure:

The market consists of two segments:
- The Venture Capital market refers to private equity funding that is offered to startups and emerging companies.
- The Venture Debt market refers to the combination between equity and debt financing, which is used to finance the early stage and growth stage capital-backed companies.
The market data comprises of the amount of capital raised, number of deals, and average deal size.

Additional information:

Although the Traditional Capital Raising market is highly competitive in investment opportunities due to the rapidly high growth rate of startups and emerging companies, it has become more popular for these businesses who cannot get traditional loans from banks, to develop and grow their businesses or projects.
Key players in this market are companies such as Sequoia Capital and Hercules Capital.

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Venture Capital
Venture Debt

Traditional bank loans
Digital capital raising

The Traditional Capital Raising market in Argentina has been experiencing significant development in recent years.

Customer preferences: In Argentina, there is a growing preference among businesses to raise capital through traditional methods such as bank loans, bonds, and equity offerings. This is due to the established trust and familiarity that these methods provide to both businesses and investors. Additionally, traditional capital raising methods allow businesses to maintain control over their operations and decision-making processes, which is highly valued by many Argentine entrepreneurs.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Argentina is the increasing demand for bank loans. This can be attributed to the relatively low interest rates offered by banks, making it an attractive option for businesses looking to raise capital. Furthermore, the availability of government-backed loan programs has also contributed to the popularity of bank loans as a capital raising method. Another trend in the market is the rise of corporate bond issuances. Many businesses in Argentina are turning to the bond market to raise capital, as it provides them with access to a wider pool of investors and allows for greater flexibility in terms of the amount and timing of capital raised. The demand for corporate bonds is driven by both domestic and international investors who are attracted to the high yields offered by Argentine bonds.

Local special circumstances: Argentina's unique economic and political landscape has also played a role in the development of the Traditional Capital Raising market. The country has a history of economic volatility, with periods of high inflation and currency devaluation. As a result, businesses in Argentina have traditionally relied on traditional capital raising methods to mitigate the risks associated with these economic uncertainties. Furthermore, the Argentine government has implemented policies to support the development of the capital markets. This includes the introduction of tax incentives for investors in certain types of securities, as well as the establishment of regulatory frameworks that promote transparency and investor protection.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Argentina is also influenced by underlying macroeconomic factors. The country has been experiencing a period of economic growth, which has increased the demand for capital among businesses. Additionally, the low interest rate environment and the availability of liquidity in the banking system have made traditional capital raising methods more attractive to businesses. In conclusion, the Traditional Capital Raising market in Argentina is developing due to customer preferences for familiar and trusted capital raising methods, such as bank loans and bond issuances. The local special circumstances, including the economic and political landscape, as well as government policies, have also contributed to the growth of the market. Furthermore, underlying macroeconomic factors, such as economic growth and low interest rates, have increased the demand for traditional capital raising methods among businesses in Argentina.

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.