Market Insights Financial Capital Raising

Traditional Capital Raising - Eastern Africa

Eastern Africa

The Traditional Capital Raising market market in Eastern Africa is expected to reach a Total Capital Raised of US$993.1m in 2024.
Venture Capital is set to lead the market with a projected market volume of US$925.6m in 2024.
When compared globally, the United States is anticipated to generate the highest Capital Raised amount of US$296,400.0m in 2024.
In Eastern Africa, traditional capital raising methods like IPOs are gaining traction, offering local firms access to public markets for expansion and growth.

Key regions: Israel, Brazil, United States, Europe, United Kingdom

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Region

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Analyst Opinion

Traditional Capital Raising market in Eastern Africa has been experiencing significant growth and development in recent years. Customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors have all played a role in shaping this growth.

Customer preferences in Eastern Africa have shown a strong inclination towards traditional capital raising methods. This is primarily due to cultural and historical factors, as well as a lack of awareness and understanding of alternative financing options. Traditional methods such as bank loans, personal savings, and family and friends' contributions are preferred by customers in the region.

This preference is also driven by a desire for simplicity and familiarity in financial transactions. Trends in the market reflect the increasing demand for capital raising in Eastern Africa. The region has witnessed a steady rise in the number of small and medium-sized enterprises (SMEs) seeking funding for business expansion and development.

This has led to an increase in the demand for traditional capital raising methods, as SMEs often lack the collateral or credit history required for other financing options. Additionally, the growing interest in entrepreneurship and the emergence of a vibrant startup ecosystem have contributed to the demand for traditional capital raising. Local special circumstances in Eastern Africa also contribute to the development of the traditional capital raising market.

Limited access to formal financial institutions, particularly in rural areas, has led individuals and businesses to rely on informal lending networks and traditional methods of capital raising. This has created a unique market dynamic where traditional capital raising methods continue to thrive alongside formal financial institutions. Underlying macroeconomic factors further support the growth of the traditional capital raising market in Eastern Africa.

The region has experienced steady economic growth, which has created a favorable environment for business expansion and investment. Additionally, the high levels of remittances from the diaspora community have provided a source of capital for individuals and businesses in the region. These factors have contributed to the increased demand for traditional capital raising methods.

In conclusion, the Traditional Capital Raising market in Eastern Africa is developing due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The preference for traditional methods, the rise of SMEs, limited access to formal financial institutions, and favorable macroeconomic conditions all contribute to the growth of this market. As the region continues to experience economic growth and the demand for capital increases, the traditional capital raising market is expected to further expand and evolve.

Methodology

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.