Traditional Capital Raising - Cambodia

The country of Cambodia is projected to see the Total Capital Raised in the Traditional Capital Raising market market reach US$117.20m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$110.50m in 2024.
In global comparison, the United States is expected to generate the most Capital Raised with US$159.0bn in 2024.
Cambodia's traditional capital raising market is witnessing a surge in interest from local investors seeking to support domestic entrepreneurship.

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 Cambodia has been experiencing significant growth and development in recent years.

Customer preferences: Cambodian investors have shown a strong preference for traditional capital raising methods, such as bank loans and personal savings. This is largely due to the lack of awareness and understanding of alternative investment options, as well as a conservative approach to financial management. Additionally, the majority of the population in Cambodia still lacks access to formal banking services, which further limits their options for capital raising.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Cambodia is the increasing demand for bank loans. As the country's economy continues to grow, businesses and individuals are seeking financing to support their expansion plans and investment projects. Banks have responded to this demand by offering a wider range of loan products and more competitive interest rates. This has made bank loans a more attractive option for capital raising in Cambodia. Another trend in the market is the rising popularity of microfinance institutions (MFIs) as a source of funding. MFIs play a crucial role in providing financial services to the unbanked population in Cambodia. They offer small loans to individuals and businesses who do not have access to traditional banking services. The convenience and accessibility of MFIs have made them an increasingly popular choice for capital raising, particularly among small and medium-sized enterprises.

Local special circumstances: One of the unique characteristics of the Traditional Capital Raising market in Cambodia is the strong influence of informal lending practices. Many Cambodians still rely on informal lenders, such as family and friends, for their financing needs. This is partly due to the lack of trust in formal financial institutions and the perception that they are inaccessible or unaffordable. Informal lending practices continue to coexist with formal capital raising methods, providing an alternative source of funding for those who are unable or unwilling to access traditional financial services.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Cambodia is closely tied to the country's macroeconomic conditions. Cambodia has experienced robust economic growth in recent years, driven by sectors such as construction, manufacturing, and tourism. This has created a favorable environment for capital raising, as businesses seek financing to support their expansion plans and take advantage of new opportunities. Additionally, the government of Cambodia has implemented various initiatives to promote financial inclusion and support the growth of the financial sector. These include the establishment of credit bureaus, the introduction of new banking regulations, and the promotion of digital financial services. These initiatives have helped to improve the accessibility and affordability of formal capital raising options, encouraging more individuals and businesses to participate in the Traditional Capital Raising market. In conclusion, the Traditional Capital Raising market in Cambodia is developing and evolving in response to changing customer preferences, local special circumstances, and underlying macroeconomic factors. The increasing demand for bank loans, the popularity of microfinance institutions, the influence of informal lending practices, and the favorable macroeconomic conditions are all contributing to the growth and development of the market. As Cambodia's economy continues to expand and financial inclusion improves, it is expected that the Traditional Capital Raising market will continue to thrive.

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.