Traditional Capital Raising - Asia

The Traditional Capital Raising market market in Asia is projected to reach a Total Capital Raised of US$118.20bn in 2024.
Venture Capital is expected to dominate the market with a projected market volume of US$103.40bn in 2024.
In global comparison, the United States will generate the most Capital Raised (US$159.0bn in 2024).
In Asia, Japan's traditional capital raising market shows a preference for equity financing over debt instruments for business expansion.

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 Asia is experiencing significant growth and development.

Customer preferences: Asian investors have traditionally favored traditional capital raising methods such as initial public offerings (IPOs) and private placements. This preference is driven by a number of factors, including the perception of these methods as more secure and regulated, as well as the potential for higher returns. Additionally, cultural factors such as a preference for long-term investments and a belief in the value of tangible assets have also contributed to the popularity of traditional capital raising methods in Asia.

Trends in the market: One of the key trends in the traditional capital raising market in Asia is the increasing use of technology. This is particularly evident in countries such as China and India, where online platforms have emerged as a popular way for companies to raise capital. These platforms provide a streamlined and efficient way for companies to connect with potential investors, and have become particularly popular among small and medium-sized enterprises (SMEs) that may have previously struggled to access traditional capital raising channels. Another trend in the market is the growing interest in alternative forms of capital raising, such as crowdfunding and peer-to-peer lending. These methods offer companies the opportunity to raise capital from a wide range of investors, and can be particularly attractive for startups and early-stage companies that may not have access to traditional financing options. In addition, these methods often provide a more flexible and accessible way for investors to participate in the market, which has contributed to their growing popularity in Asia.

Local special circumstances: Asia is a diverse region with a wide range of local special circumstances that impact the traditional capital raising market. For example, in countries such as Japan and South Korea, there is a strong emphasis on corporate governance and transparency, which has helped to build investor confidence in traditional capital raising methods. In contrast, in countries such as China and India, there are often concerns about the regulatory environment and the potential for fraud, which has led to a greater reliance on alternative capital raising methods.

Underlying macroeconomic factors: Several underlying macroeconomic factors are driving the development of the traditional capital raising market in Asia. One of the key factors is the region's strong economic growth, which has created a favorable environment for companies looking to raise capital. Additionally, the increasing wealth and disposable income of Asian consumers has created a growing pool of potential investors, driving demand for traditional capital raising opportunities. Furthermore, the continued globalization of Asian economies has opened up new opportunities for companies to access international capital markets. This has been particularly evident in countries such as China, where the government has implemented a series of reforms aimed at liberalizing the capital markets and attracting foreign investment. These reforms have helped to drive the development of the traditional capital raising market in Asia by providing companies with greater access to global financing options. In conclusion, the traditional capital raising market in Asia is experiencing significant growth and development driven by customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The increasing use of technology, the growing interest in alternative forms of capital raising, and the diverse local special circumstances in the region are all contributing to the evolution of the market. Additionally, the strong economic growth, increasing wealth, and globalization of Asian economies are creating a favorable environment for companies to raise capital through traditional methods.

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.