Traditional Capital Raising - Canada

The Total Capital Raised in the Traditional Capital Raising market market in Canada is projected to reach US$7.88bn in 2024.
Venture Capital dominates the market with a projected market volume of US$6.88bn in 2024.
In global comparison, most Capital Raised will be generated the United States (US$159.0bn in 2024).
Traditional Capital Raising in Canada sees a notable shift towards alternative financing methods, reflecting a growing appetite for innovative investment structures.

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 Canada is experiencing significant growth and development.

Customer preferences: In Canada, there is a strong preference among businesses and entrepreneurs to raise capital through traditional methods such as bank loans, private placements, and initial public offerings (IPOs). This preference is driven by the stability and reliability of these traditional capital raising methods, as well as the established network of financial institutions and investors in the country.

Trends in the market: One notable trend in the Traditional Capital Raising market in Canada is the increasing popularity of private placements. This method allows companies to raise capital from a select group of investors without going through the rigorous regulatory process of an IPO. Private placements are particularly attractive to smaller businesses and startups that may not meet the requirements for an IPO but still need capital to fuel their growth. Another trend is the growing interest in debt financing through bank loans. Canadian businesses are taking advantage of the historically low interest rates offered by banks to fund their operations and expansion plans. This trend is further supported by the strong creditworthiness of Canadian businesses and the stable financial system in the country.

Local special circumstances: One of the unique aspects of the Traditional Capital Raising market in Canada is the presence of government support programs and incentives for businesses. The Canadian government offers various grants, loans, and tax credits to encourage businesses to invest in research and development, innovation, and job creation. These programs provide additional avenues for businesses to raise capital and fuel their growth.

Underlying macroeconomic factors: The growth and development of the Traditional Capital Raising market in Canada can be attributed to several underlying macroeconomic factors. Firstly, Canada has a stable and well-regulated financial system, which provides a solid foundation for businesses to access capital. Additionally, the country has a strong and diversified economy, with industries such as finance, technology, natural resources, and manufacturing driving growth and attracting investment. Furthermore, Canada has a highly educated workforce and a culture of entrepreneurship, which fosters innovation and the creation of new businesses. This entrepreneurial spirit, combined with the availability of capital through traditional methods, contributes to the growth of the capital raising market in the country. In conclusion, the Traditional Capital Raising market in Canada is experiencing significant growth and development due to customer preferences for stability and reliability, the increasing popularity of private placements, the interest in debt financing through bank loans, government support programs and incentives, and underlying macroeconomic factors such as a stable financial system, a strong and diversified economy, and a culture of entrepreneurship.

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.