Traditional Capital Raising - Russia

Russia

Highlights

The country in Russia is projected to reach a Total Capital Raised in the Traditional Capital Raising market market of US$667.10m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$658.90m in 2024.
In global comparison, the United States is expected to generate the most Capital Raised with US$159.0bn in 2024.
Traditional Capital Raising in Russia is seeing a resurgence, with local businesses opting for established financial avenues over riskier investment options.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Traditional Capital Raising market in Russia is experiencing significant growth and development due to various factors.

Customer preferences: Russian investors have shown a growing interest in traditional capital raising methods such as initial public offerings (IPOs) and bond issuances. This preference can be attributed to the perceived stability and transparency of these traditional methods, which provide investors with a clear understanding of the risks and returns associated with their investments. Additionally, traditional capital raising methods allow investors to participate in the growth of established companies and government projects, which are often seen as more reliable and less risky compared to alternative investment options.

Trends in the market: One of the key trends in the traditional capital raising market in Russia is the increasing number of IPOs. Russian companies are increasingly choosing to go public as a means of raising capital to finance their expansion plans and fund new projects. This trend can be attributed to several factors, including the growing investor appetite for Russian stocks, improved market conditions, and the government's efforts to attract foreign investment. The IPO market in Russia has also benefited from the increasing number of successful IPOs in recent years, which has boosted investor confidence and generated positive momentum. Another trend in the traditional capital raising market in Russia is the rising popularity of bond issuances. Russian companies and the government are increasingly turning to bond markets to raise capital due to the low interest rate environment and the relative ease of accessing bond markets. Bond issuances provide companies with an alternative source of financing that is often more cost-effective than traditional bank loans. Furthermore, bond issuances allow companies to diversify their sources of funding and attract a broader range of investors.

Local special circumstances: The traditional capital raising market in Russia is influenced by several local special circumstances. One of these is the government's efforts to attract foreign investment by implementing various reforms and initiatives. These include the introduction of new laws and regulations to improve corporate governance, enhance investor protection, and increase transparency in the capital markets. These reforms have helped to boost investor confidence and attract foreign investors to the Russian market, thereby contributing to the growth of the traditional capital raising market. Another local special circumstance is the presence of state-owned enterprises in the Russian market. These companies often play a significant role in the traditional capital raising market, as they frequently raise capital through bond issuances and IPOs. The government's ownership and control of these companies can have a significant impact on the market dynamics and investor sentiment. Additionally, the government's support for these companies can provide them with a competitive advantage in the capital raising process.

Underlying macroeconomic factors: Several underlying macroeconomic factors are driving the development of the traditional capital raising market in Russia. One of these is the country's economic growth and stability. Russia has experienced relatively stable economic growth in recent years, which has created a favorable environment for companies to raise capital. Additionally, the government's focus on economic diversification and modernization has led to increased investment opportunities and a growing demand for capital. Another macroeconomic factor is the low interest rate environment. The Central Bank of Russia has implemented a monetary policy that aims to maintain low interest rates to stimulate economic growth. This low interest rate environment has made borrowing more affordable for companies, thereby encouraging them to seek alternative sources of financing such as bond issuances. In conclusion, the traditional capital raising market in Russia is developing and growing due to customer preferences for stability and transparency, the increasing number of IPOs, the rising popularity of bond issuances, local special circumstances such as government reforms and the presence of state-owned enterprises, and underlying macroeconomic factors such as economic growth and a low interest rate environment. These factors have created a favorable environment for companies to raise capital and attract investors, contributing to the growth and development of the traditional capital raising market in Russia.

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.