Traditional Capital Raising - Peru

The Traditional Capital Raising market market in Peru is expected to achieve a Total Capital Raised of US$58.50m by 2024.
Venture Capital is set to lead the market with a projected market volume of US$58.29m in 2024.
When compared globally, the United States is anticipated to generate the highest Capital Raised amount, reaching US$159.0bn in 2024.
Peru's Traditional Capital Raising market is experiencing a resurgence in interest from local investors seeking to support domestic 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 Peru has been experiencing significant growth in recent years.

Customer preferences: Peruvian investors have shown a strong preference for traditional capital raising methods, such as initial public offerings (IPOs) and debt issuance. This preference can be attributed to the perception of these methods as more secure and reliable compared to alternative forms of capital raising. Additionally, investors in Peru tend to have a conservative approach to investing, and traditional capital raising methods align with their risk appetite.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Peru is the increasing number of IPOs. Companies in various sectors, including technology, consumer goods, and financial services, have chosen to go public to raise capital for expansion and growth. The success of these IPOs has attracted more companies to consider this option, leading to a positive cycle of growth in the market. Another trend in the market is the growing demand for debt issuance. Peruvian companies, both large and small, are increasingly turning to debt markets to raise capital for various purposes, such as financing acquisitions, funding working capital needs, and investing in infrastructure projects. The availability of low interest rates and favorable lending conditions have made debt issuance an attractive option for companies in Peru.

Local special circumstances: Peru's strong economic growth and stable political environment have created a conducive environment for traditional capital raising activities. The country has experienced sustained economic expansion in recent years, driven by sectors such as mining, manufacturing, and services. This growth has increased investor confidence and created opportunities for companies to raise capital through IPOs and debt issuance. Additionally, Peru has a well-regulated financial market with established stock exchanges and a robust legal framework. This provides companies with the necessary infrastructure and investor protection measures, further enhancing the attractiveness of traditional capital raising methods.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the Traditional Capital Raising market in Peru. The country's low inflation rate and stable currency have fostered a favorable investment climate, attracting both domestic and foreign investors. Furthermore, Peru's strong economic fundamentals, such as sound fiscal policies and prudent monetary management, have instilled confidence in the market and encouraged capital inflows. In conclusion, the Traditional Capital Raising market in Peru is experiencing significant growth due to customer preferences for secure and reliable investment options, such as IPOs and debt issuance. The increasing number of IPOs and the growing demand for debt issuance are key trends in the market. Peru's strong economic growth, stable political environment, well-regulated financial market, and favorable macroeconomic factors have created a conducive environment for traditional capital raising activities in the country.

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.