Traditional Capital Raising - Estonia

The country in Estonia is expected to see Total Capital Raised in the Traditional Capital Raising market market reach US$95.14m by 2024.
Within this market, Venture Capital is set to dominate, with a projected market volume of US$93.96m by 2024.
When compared globally, the United States is anticipated to generate the most Capital Raised, with US$159.0bn in 2024.
Estonia's traditional capital raising market is seeing a shift towards more tech-savvy crowdfunding platforms, offering diverse investment opportunities to local entrepreneurs.

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

Customer preferences: Estonian investors have shown a strong preference for traditional capital raising methods, such as initial public offerings (IPOs) and private placements. This is due to the perceived stability and reliability of these methods, as well as the potential for high returns. Additionally, there is a growing interest in crowdfunding platforms, which provide an alternative way for individuals to invest in startups and small businesses.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Estonia is the increasing number of IPOs. This can be attributed to several factors, including the strong performance of the Estonian economy, the availability of funding from venture capital firms, and the desire of companies to expand and grow their operations. As a result, more companies are choosing to go public in order to raise capital and access the public markets. Another trend in the market is the rise of private placements. This method of capital raising allows companies to raise funds from a select group of investors, often institutional investors or high-net-worth individuals. Private placements are attractive to companies because they can offer more flexibility and control over the terms of the investment, as well as access to a pool of experienced investors.

Local special circumstances: Estonia has a strong entrepreneurial culture and a vibrant startup ecosystem, which has contributed to the growth of the Traditional Capital Raising market. The country has a favorable business environment, with low taxes and a supportive regulatory framework, making it an attractive destination for both local and international investors. Additionally, Estonia has a highly educated workforce and a strong technology sector, which has led to the emergence of innovative and high-growth companies.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Estonia is also influenced by several macroeconomic factors. The country has experienced steady economic growth in recent years, driven by strong domestic consumption, exports, and foreign direct investment. This has created a favorable business environment for companies looking to raise capital, as investors are more willing to take risks in a growing economy. Additionally, Estonia is part of the European Union, which provides access to a large market and opportunities for cross-border investments. In conclusion, the Traditional Capital Raising market in Estonia is developing rapidly, driven by customer preferences for traditional methods of capital raising, such as IPOs and private placements. The market is also influenced by local special circumstances, including a strong entrepreneurial culture and a supportive business environment. Furthermore, underlying macroeconomic factors, such as steady economic growth and EU membership, are contributing to the growth and 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.