Traditional Capital Raising - Germany

The country in Germany is expected to see Total Capital Raised in the Traditional Capital Raising market market reach US$3.23bn by 2024.
Venture Capital is set to dominate the market with a projected market volume of US$2.75bn in 2024.
When compared globally, the United States is forecasted to generate the most Capital Raised, with US$159.0bn in 2024.
Traditional Capital Raising in Germany is seeing a resurgence, with a focus on local investors and sustainable projects driving the market forward.

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 Germany has been experiencing significant growth in recent years.

Customer preferences: German investors have traditionally favored conservative investment options, such as savings accounts and government bonds. However, there has been a shift in customer preferences towards alternative investment opportunities, including traditional capital raising. This change can be attributed to several factors. Firstly, low interest rates have made traditional savings accounts less attractive, prompting investors to seek higher returns elsewhere. Additionally, the rise of digital platforms has made it easier for individuals to access and invest in traditional capital raising opportunities, increasing the appeal of this market.

Trends in the market: One of the key trends in the traditional capital raising market in Germany is the increasing popularity of crowdfunding. Crowdfunding allows individuals to invest in a wide range of projects and businesses, providing them with the opportunity to diversify their investment portfolios. This trend is driven by the growing number of startups and small businesses in Germany, which are seeking alternative sources of funding. Furthermore, the transparency and accessibility of crowdfunding platforms have made them an attractive option for both investors and entrepreneurs. Another trend in the market is the rise of peer-to-peer lending. This form of traditional capital raising allows individuals to lend money directly to borrowers, cutting out the middleman and potentially earning higher returns. Peer-to-peer lending platforms have gained traction in Germany due to their ability to offer competitive interest rates and flexible investment terms. This trend is also supported by the increasing demand for credit among individuals and small businesses, as traditional banks have become more stringent in their lending practices.

Local special circumstances: Germany has a strong entrepreneurial culture and a thriving startup ecosystem. This has created a fertile ground for traditional capital raising, as entrepreneurs seek funding to bring their innovative ideas to life. The German government has also implemented policies to support startups and small businesses, providing them with access to grants and incentives. These factors have contributed to the growth of the traditional capital raising market in Germany.

Underlying macroeconomic factors: The growth of the traditional capital raising market in Germany can be attributed to several underlying macroeconomic factors. Firstly, the country's strong economic performance and stable political environment have instilled confidence in investors, encouraging them to explore new investment opportunities. Additionally, the low interest rate environment in Germany and the Eurozone as a whole has made traditional capital raising an attractive option for investors seeking higher returns. Finally, the increasing digitization of financial services has made it easier for individuals to access and invest in traditional capital raising opportunities, further driving the growth of the market. In conclusion, the traditional capital raising market in Germany is experiencing significant growth due to changing customer preferences, including a shift towards alternative investments. The rise of crowdfunding and peer-to-peer lending platforms, as well as the country's strong entrepreneurial culture and supportive government policies, have contributed to this growth. Additionally, underlying macroeconomic factors such as the low interest rate environment and increasing digitization of financial services have further fueled 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.