Traditional Capital Raising - Mexico

The country in Mexico is projected to reach a Total Capital Raised of US$2.56bn in the Traditional Capital Raising market market in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$2.25bn in 2024 in Mexico.
In global comparison, the United States is expected to generate the most Capital Raised, with US$159.0bn in 2024.
Traditional capital raising in Mexico's market is seeing a resurgence, with local businesses turning to established methods to secure funding for expansion and development.

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 Mexico is experiencing significant growth and development.

Customer preferences: Mexican investors have shown a strong preference for traditional capital raising methods, such as initial public offerings (IPOs) and debt issuance. This is due to a combination of factors, including a desire for stable returns and a lack of familiarity with alternative investment options. Additionally, Mexican investors tend to have a conservative approach to investing and prefer to invest in established companies with a track record of success.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Mexico is the increasing number of IPOs. This can be attributed to several factors, including the growing number of successful Mexican companies looking to expand their operations and the increasing interest from foreign investors. Mexican companies are recognizing the benefits of going public, such as access to capital for growth and increased visibility in the market. As a result, they are increasingly turning to IPOs as a means of raising capital. Another trend in the market is the rising demand for debt issuance. Mexican companies are increasingly turning to debt markets to raise capital for various purposes, such as financing acquisitions, expanding operations, or refinancing existing debt. This trend is driven by several factors, including the low interest rate environment, which makes borrowing more attractive, and the increased availability of debt financing options.

Local special circumstances: Mexico has a well-developed regulatory framework for capital raising activities, which provides a level of investor protection and transparency. This has helped to foster investor confidence and attract both domestic and foreign investors to the market. Additionally, the Mexican government has implemented various initiatives to promote capital raising activities, such as tax incentives for investors and streamlined regulatory processes.

Underlying macroeconomic factors: The Traditional Capital Raising market in Mexico is also influenced by underlying macroeconomic factors. For example, the country's stable economic growth and low inflation rate have created a favorable environment for capital raising activities. Additionally, the Mexican government's efforts to promote economic development and attract foreign investment have contributed to the growth of the capital raising market. In conclusion, the Traditional Capital Raising market in Mexico is experiencing significant growth and development, driven by customer preferences for traditional capital raising methods, such as IPOs and debt issuance. The market is also influenced by trends such as the increasing number of IPOs and the rising demand for debt issuance. Local special circumstances, including a well-developed regulatory framework and government initiatives to promote capital raising activities, contribute to the growth of the market. Underlying macroeconomic factors, such as stable economic growth and low inflation, further support the development of the capital raising market in Mexico.

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.