Traditional Capital Raising - Kenya

The country in Kenya is expected to see the Total Capital Raised in the Traditional Capital Raising market market reach US$411.20m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$403.10m in 2024.
When compared globally, the United States will lead in Capital Raised, generating US$159.0bn in 2024.
Kenya's Traditional Capital Raising market is seeing a rise in demand for local investment opportunities, driven by a growing interest in supporting homegrown businesses.

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 Kenya is experiencing significant growth and development.

Customer preferences: One of the key reasons for the growth in the Traditional Capital Raising market in Kenya is the increasing demand from local businesses and entrepreneurs. Many small and medium-sized enterprises (SMEs) in the country are looking for capital to expand their operations, invest in new technologies, and enter new markets. These businesses prefer traditional capital raising methods such as bank loans and equity financing as they offer stability and established processes.

Trends in the market: A major trend in the Traditional Capital Raising market in Kenya is the rise of crowdfunding platforms. These platforms provide a new avenue for entrepreneurs to raise capital by connecting them with a large pool of potential investors. The convenience and accessibility of crowdfunding have made it an attractive option for many Kenyan entrepreneurs, especially those in the technology and innovation sectors. Another trend in the market is the increasing participation of international investors. Kenya's growing economy and favorable investment climate have attracted foreign investors who are keen to tap into the country's potential. These investors are not only providing capital but also bringing in expertise and networks that can help local businesses grow and expand.

Local special circumstances: Kenya's vibrant entrepreneurial ecosystem and supportive government policies have also contributed to the growth of the Traditional Capital Raising market. The government has implemented various initiatives to promote entrepreneurship and innovation, including the establishment of special economic zones and the provision of tax incentives for startups. These measures have created a conducive environment for businesses to thrive and attract capital.

Underlying macroeconomic factors: The growth of the Traditional Capital Raising market in Kenya is also influenced by underlying macroeconomic factors. The country's stable economic growth, low inflation rate, and favorable interest rates have made it an attractive destination for capital investment. Additionally, Kenya's young and growing population, as well as its increasing urbanization, provide a large consumer base and market potential, further attracting investors. In conclusion, the Traditional Capital Raising market in Kenya is experiencing significant growth and development. The increasing demand from local businesses, the rise of crowdfunding platforms, the participation of international investors, and the supportive government policies are all contributing to this growth. Furthermore, Kenya's stable macroeconomic factors and favorable investment climate make it an attractive destination for capital investment.

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.