Traditional Capital Raising - New Zealand

The Total Capital Raised in the Traditional Capital Raising market market in New Zealand is expected to reach US$257.80m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$243.20m in 2024.
When compared globally, the United States will lead in Capital Raised, with US$159.0bn in 2024.
New Zealand's traditional capital raising market is witnessing a shift towards more sustainable and socially responsible investment opportunities.

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 New Zealand has been experiencing significant development in recent years.

Customer preferences: New Zealand investors have shown a growing interest in traditional capital raising methods. They have been increasingly seeking opportunities to invest in local businesses and startups, recognizing the potential for high returns. This preference for traditional capital raising methods can be attributed to the trust and familiarity that investors have with these methods, as well as the perceived stability and security they offer.

Trends in the market: One of the key trends in the Traditional Capital Raising market in New Zealand is the rise of equity crowdfunding. This method allows businesses to raise capital by offering shares to a large number of individual investors. Equity crowdfunding has gained popularity due to its ability to democratize investment opportunities and provide access to early-stage companies that were previously only available to institutional investors. This trend is driven by the desire of investors to diversify their portfolios and support local businesses. Another trend in the market is the increasing use of initial public offerings (IPOs) as a capital raising method. IPOs have become more common in New Zealand as companies seek to expand and access larger pools of capital. The growth of the stock market in New Zealand has also contributed to this trend, as it provides a platform for companies to list their shares and attract investment from both local and international investors.

Local special circumstances: New Zealand's small size and close-knit business community have created a unique environment for traditional capital raising. The country's relatively small population means that local businesses often rely on the support of domestic investors to raise capital. This has fostered a sense of community and collaboration, with investors and entrepreneurs working closely together to drive economic growth. Furthermore, New Zealand's entrepreneurial culture and government support for startups have played a significant role in the development of the Traditional Capital Raising market. The government has implemented various initiatives and programs to encourage entrepreneurship and innovation, providing funding and support for startups. This has created a favorable environment for traditional capital raising, as entrepreneurs have access to the resources and support they need to grow their businesses.

Underlying macroeconomic factors: New Zealand's strong economic performance and stable political environment have also contributed to the development of the Traditional Capital Raising market. The country has experienced consistent economic growth in recent years, attracting both domestic and international investors. This economic stability has instilled confidence in investors and created a favorable climate for capital raising activities. Additionally, low interest rates and a relatively high savings rate in New Zealand have encouraged investors to seek alternative investment opportunities. Traditional capital raising methods offer the potential for higher returns compared to traditional savings accounts or fixed income investments. This has further fueled the demand for capital raising options in the country. In conclusion, the Traditional Capital Raising market in New Zealand has been developing due to customer preferences for local investments, the rise of equity crowdfunding and IPOs, local special circumstances such as a close-knit business community and government support for startups, as well as underlying macroeconomic factors such as strong economic performance and low interest rates. These factors have created a favorable environment for traditional capital raising in New Zealand and are likely to continue driving its growth in the future.

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.