Traditional Capital Raising - Cyprus

The country in Cyprus is expected to see Total Capital Raised in the Traditional Capital Raising market market reach US$319.60m in 2024.
Venture Capital is set to dominate this market with a projected volume of US$319.20m in 2024.
When compared globally, the United States is anticipated to generate the most Capital Raised (US$159.0bn in 2024).
Cyprus sees a growing interest in traditional capital raising methods, reflecting a conservative approach to financial investment in the capital raising market.

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 Cyprus has been experiencing significant growth in recent years.

Customer preferences: In Cyprus, there is a strong preference for traditional capital raising methods such as bank loans and private equity investments. This is due to the conservative nature of the local business community and a general distrust of alternative financing options.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Cyprus is the increasing demand for bank loans. This is driven by the need for working capital and expansion financing by small and medium-sized enterprises (SMEs). Banks in Cyprus have been actively lending to businesses, offering competitive interest rates and flexible repayment terms. Another trend in the market is the growing interest in private equity investments. Cyprus has seen an influx of international investors looking to invest in local businesses. These investors are attracted by the country's favorable tax regime, strategic location, and skilled workforce. Private equity investments provide businesses with the necessary capital to fund their growth plans and expand into new markets.

Local special circumstances: Cyprus has a unique business environment that contributes to the development of the Traditional Capital Raising market. The country is known for its strong legal framework, investor-friendly regulations, and political stability. These factors make Cyprus an attractive destination for both domestic and foreign investors. Furthermore, Cyprus has a well-developed banking sector that plays a crucial role in the capital raising process. Banks in Cyprus have a long history of providing financing to businesses and have established relationships with local entrepreneurs. This makes it easier for businesses to access capital and navigate the capital raising process.

Underlying macroeconomic factors: The growth of the Traditional Capital Raising market in Cyprus can be attributed to several underlying macroeconomic factors. Firstly, the country has experienced a steady economic recovery since the financial crisis of 2013. This has led to increased business confidence and a greater willingness to invest in growth opportunities. Secondly, Cyprus has a strong entrepreneurial culture, with many individuals starting their own businesses or seeking opportunities to expand existing ones. This entrepreneurial spirit has created a demand for capital to finance business ventures and support economic growth. Lastly, Cyprus has a well-educated and skilled workforce, which is attractive to investors looking to establish or expand their operations in the country. This, coupled with the country's strategic location at the crossroads of Europe, Asia, and Africa, makes Cyprus an ideal destination for businesses looking to access international markets. In conclusion, the Traditional Capital Raising market in Cyprus is experiencing growth due to customer preferences for traditional financing methods, such as bank loans and private equity investments. The country's unique business environment, including a strong legal framework and investor-friendly regulations, further contributes to this growth. Additionally, underlying macroeconomic factors such as a steady economic recovery, a strong entrepreneurial culture, and a skilled workforce have also played a role in the development 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.