Traditional Capital Raising - Chile

The Traditional Capital Raising market in Chile is expected to achieve a total capital raised of US$454.60m in 2024.
Within this market, venture capital is set to lead with a projected market volume of US$447.20m in the same year.
When looking at global figures, the United States is anticipated to generate the highest capital raised, reaching US$159.0bn in 2024.
Chile's Traditional Capital Raising market shows a preference for local investors, fostering strong relationships and promoting stability in fundraising efforts.

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 Chile has been experiencing significant growth in recent years.

Customer preferences: Customers in Chile have shown a strong preference for traditional capital raising methods such as Initial Public Offerings (IPOs) and debt offerings. This is due to the perception of these methods as being more secure and reliable compared to alternative options such as crowdfunding or peer-to-peer lending. Additionally, Chilean investors tend to have a conservative investment approach and prefer to invest in established companies with a proven track record.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Chile is the increasing number of companies opting for IPOs. This can be attributed to several factors, including the growing number of successful IPOs in recent years, which has increased investor confidence in the market. Additionally, the Chilean government has implemented several initiatives to promote IPOs and make the process more streamlined and attractive for companies. Another trend in the market is the rise of debt offerings, particularly corporate bonds. This can be attributed to the low interest rate environment in Chile, which has made borrowing more affordable for companies. Additionally, the stability of the Chilean economy and the strong credit ratings of many Chilean companies have made corporate bonds an attractive investment option for both domestic and international investors.

Local special circumstances: Chile has a well-developed financial market, with a robust regulatory framework and a strong investor base. This has created a favorable environment for traditional capital raising methods to thrive. Additionally, Chile has a strong culture of entrepreneurship and a growing number of companies looking to expand and raise capital to fund their growth.

Underlying macroeconomic factors: The growth of the Traditional Capital Raising market in Chile can also be attributed to several underlying macroeconomic factors. Chile has experienced stable economic growth in recent years, driven by sectors such as mining, agriculture, and services. This has created a favorable investment climate and increased investor confidence in the market. Furthermore, Chile has a strong legal and regulatory framework that protects investors and ensures transparency in the capital raising process. This has helped to build trust in the market and attract both domestic and international investors. In conclusion, the Traditional Capital Raising market in Chile is experiencing significant growth due to customer preferences for traditional methods, such as IPOs and debt offerings. The market is also benefiting from trends such as the increasing number of companies opting for IPOs and the rise of debt offerings. Local special circumstances, such as a well-developed financial market and a strong culture of entrepreneurship, have created a favorable environment for traditional capital raising methods to thrive. Underlying macroeconomic factors, including stable economic growth and a strong legal and regulatory framework, have further contributed to the growth of the market.

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.