Traditional Capital Raising - Europe

The Total Capital Raised in Europe's Traditional Capital Raising market market is expected to reach US$22.97bn in 2024.
Venture Capital is set to lead the market with a projected market volume of US$18.85bn in 2024.
When compared globally, the United States will generate the highest Capital Raised at US$159.0bn in 2024.
In Europe, traditional capital raising through IPOs in the capital raising market is experiencing a resurgence, attracting both local and international investors.

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 Europe 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 contributed to this positive trajectory.

Customer preferences in Europe have shifted towards more traditional forms of capital raising, such as initial public offerings (IPOs) and debt issuance. This is partly due to the perceived stability and reliability of these methods, as well as the potential for higher returns. Additionally, European investors have shown a preference for investing in local companies, which has further fueled the demand for traditional capital raising.

One of the key trends in the European capital raising market is the increasing number of IPOs. Companies across various sectors are choosing to go public in order to raise funds for expansion and growth. This trend is driven by a combination of factors, including favorable market conditions, increased investor appetite for IPOs, and the potential for higher valuations.

The technology sector, in particular, has seen a surge in IPO activity, with several high-profile companies choosing to list on European stock exchanges. Another trend in the market is the growing popularity of debt issuance. European companies are increasingly turning to the bond market to raise capital, taking advantage of historically low interest rates.

This trend is driven by the need for companies to finance their operations and investments, as well as the attractive terms offered by bond investors. The bond market also provides companies with the flexibility to tailor their financing needs to their specific requirements. In addition to customer preferences and market trends, there are also local special circumstances that have contributed to the development of the Traditional Capital Raising market in Europe.

One such circumstance is the presence of well-established stock exchanges and financial institutions across the region. These institutions provide the necessary infrastructure and expertise to facilitate capital raising activities, making it easier for companies to access funding. Underlying macroeconomic factors have also played a role in the growth of the Traditional Capital Raising market in Europe.

The region's strong economic performance and favorable business environment have attracted both domestic and international investors. Additionally, the European Union's regulatory framework has provided a stable and transparent environment for capital raising activities, further boosting investor confidence. Overall, the Traditional Capital Raising market in Europe is experiencing growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

As European companies continue to seek funding for expansion and growth, traditional forms of capital raising are likely to remain popular in the region. However, it is important to note that market conditions can change rapidly, and companies must carefully consider their financing options to ensure they meet their specific needs and objectives.

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.