Traditional Capital Raising - China

The country in China is projected to reach a Total Capital Raised of US$78.41bn in the Traditional Capital Raising market market by 2024.
Venture Capital is expected to dominate the market with a projected volume of US$68.68bn in 2024.
In global comparison, the United States is anticipated to generate the highest Capital Raised amount of US$159.0bn in 2024.
In China, the Traditional Capital Raising market is witnessing a resurgence in interest from local investors seeking stable long-term investment opportunities.

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

Customer preferences: Chinese investors have traditionally favored traditional capital raising methods such as bank loans and private equity investments. However, there has been a shift in customer preferences towards alternative forms of capital raising, such as crowdfunding and peer-to-peer lending platforms. This shift can be attributed to several factors, including increased access to technology and the desire for greater control and transparency in investment decisions.

Trends in the market: One of the key trends in the Traditional Capital Raising market in China is the rise of crowdfunding platforms. These platforms allow individuals and businesses to raise capital from a large number of investors, often through small contributions. This has democratized the capital raising process and provided opportunities for smaller businesses and entrepreneurs who may have previously struggled to secure funding through traditional channels. Another trend in the market is the growing popularity of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, cutting out traditional financial intermediaries such as banks. This has provided an alternative source of financing for individuals and businesses, particularly those who may not meet the strict lending criteria of traditional financial institutions.

Local special circumstances: China's large population and rapidly growing middle class have contributed to the growth of the Traditional Capital Raising market. With more individuals and businesses seeking financing options, there is a greater demand for alternative capital raising methods. Additionally, the Chinese government has been supportive of the development of these platforms, recognizing their potential to drive economic growth and innovation.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the Traditional Capital Raising market in China. The country's rapid economic growth and urbanization have created a favorable environment for investment and entrepreneurship. Additionally, the government's efforts to promote innovation and technological advancement have encouraged the development of alternative capital raising platforms. In conclusion, the Traditional Capital Raising market in China is experiencing significant growth and development, driven by changing customer preferences, technological advancements, and favorable macroeconomic factors. The rise of crowdfunding and peer-to-peer lending platforms has provided individuals and businesses with alternative sources of financing, while China's large population and supportive government policies have created a favorable environment for the growth of these platforms.

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.