Traditional Capital Raising - Saudi Arabia

The Traditional Capital Raising market market in Saudi Arabia is forecasted to reach US$699.60m in 2024.
Venture Capital is set to lead the market with a projected volume of US$668.60m in 2024.
When compared globally, the United States is expected to generate the highest Capital Raised amount in 2024, reaching US$159.0bn.
In Saudi Arabia, traditional capital raising methods like IPOs are gaining traction among local companies seeking to expand their market presence.

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 Saudi Arabia is experiencing significant growth and development.

Customer preferences: Saudi Arabian investors have traditionally favored traditional capital raising methods such as bank loans and government grants. However, there has been a shift in customer preferences towards alternative sources of capital, such as venture capital and private equity. This trend can be attributed to the increasing number of startups and small businesses in the country, as well as the desire for higher returns on investment.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Saudi Arabia is the rise of crowdfunding platforms. These platforms allow individuals to invest in small businesses and startups, providing them with an alternative source of capital. This trend is driven by the increasing interest in entrepreneurship and innovation in the country, as well as the desire for diversification in investment portfolios. Another trend in the market is the growing popularity of Initial Public Offerings (IPOs). Saudi Arabia has recently witnessed several high-profile IPOs, which have attracted both local and international investors. This trend can be attributed to the government's efforts to diversify the economy and reduce dependence on oil revenues. IPOs provide companies with a means to raise capital for expansion and growth, while also providing investors with an opportunity to participate in the country's economic development.

Local special circumstances: Saudi Arabia has implemented several initiatives to support the growth of the Traditional Capital Raising market. The government has established regulatory frameworks and incentives to encourage investment in startups and small businesses. Additionally, the country's Vision 2030 plan aims to promote entrepreneurship and innovation, further driving the demand for capital raising options.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market in Saudi Arabia is also influenced by underlying macroeconomic factors. The country has a young and growing population, which provides a large pool of potential investors. Additionally, Saudi Arabia has a strong and stable economy, which attracts both domestic and international investors. The government's commitment to economic diversification and its focus on developing non-oil sectors also contribute to the growth of the capital raising market. In conclusion, the Traditional Capital Raising market in Saudi Arabia is experiencing significant growth and development. This can be attributed to changing customer preferences, including the shift towards alternative sources of capital and the increasing interest in entrepreneurship. The rise of crowdfunding platforms and the popularity of IPOs are key trends in the market. The government's support for the capital raising market, as well as underlying macroeconomic factors, such as a young and growing population and a strong economy, further contribute to the market's growth.

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.