Traditional Capital Raising - Iraq

The Total Capital Raised in the Traditional Capital Raising market market in Iraq is forecasted to reach US$5.62m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$4.78m in 2024.
When compared globally, the United States is expected to generate the most Capital Raised (US$159.0bn in 2024).
In Iraq, the Traditional Capital Raising market is experiencing a resurgence as local businesses seek funding through established financial channels.

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 Iraq has been experiencing significant development in recent years.

Customer preferences: In Iraq, there is a growing preference for traditional capital raising methods such as bank loans and equity financing. This is mainly due to the lack of awareness and understanding of alternative financing options such as crowdfunding or venture capital. Additionally, the conservative nature of the Iraqi market and cultural factors also contribute to the preference for traditional capital raising methods.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Iraq is the increasing number of small and medium-sized enterprises (SMEs) seeking funding. These businesses are looking to expand their operations and require capital to support their growth. As a result, there has been a surge in demand for traditional capital raising methods. Another trend in the market is the emergence of Islamic finance as a popular choice for capital raising in Iraq. Islamic finance adheres to Sharia principles and offers alternative financing options such as Islamic bonds (sukuk) and Islamic banking services. This trend is driven by the large Muslim population in Iraq and their preference for Sharia-compliant financial products.

Local special circumstances: Iraq has a unique set of circumstances that influence the development of the Traditional Capital Raising market. One of the main factors is the country's history of political instability and conflict, which has hindered economic growth and investment. As a result, traditional capital raising methods have remained the dominant choice for businesses seeking funding. Additionally, the lack of a well-developed financial infrastructure and regulatory framework also limits the availability of alternative financing options in Iraq. This further reinforces the reliance on traditional capital raising methods.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Iraq is also influenced by underlying macroeconomic factors. The country has a large and growing population, which creates a significant market for businesses. This population growth, coupled with increasing urbanization and a rising middle class, drives the demand for capital to support business expansion and investment. Furthermore, Iraq has abundant natural resources, particularly oil, which contributes to its economic potential. The oil sector plays a crucial role in the country's economy and attracts foreign investment. However, the reliance on oil revenues also poses risks, as fluctuations in oil prices can impact the availability of capital for businesses. In conclusion, the Traditional Capital Raising market in Iraq is developing due to customer preferences for traditional financing methods, trends such as the rise of SMEs and Islamic finance, local special circumstances such as political instability and a lack of alternative financing options, and macroeconomic factors including population growth and abundant natural resources.

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.