Traditional Capital Raising - Southeast Asia

The Total Capital Raised in the Traditional Capital Raising market market in Southeast Asia is expected to reach US$16.39bn by 2024.
Venture Capital is set to lead the market with a projected volume of US$13.28bn in 2024.
When compared globally, the United States is forecasted to generate the highest Capital Raised amount, reaching US$159.0bn by 2024.
In Southeast Asia, traditional capital raising methods like IPOs and private placements remain popular among companies seeking to raise funds.

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 Southeast Asia has been experiencing significant growth in recent years, driven by several key factors.

Customer preferences: Entrepreneurs and businesses in Southeast Asia have shown a strong preference for traditional capital raising methods, such as bank loans and venture capital funding. This is partly due to cultural factors, as traditional financing methods are often seen as more reliable and trustworthy. Additionally, many businesses in the region have limited access to alternative financing options, such as crowdfunding or angel investment networks. As a result, they rely heavily on traditional capital raising methods to fund their growth and expansion plans.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Southeast Asia is the increasing demand for bank loans. As the region's economies continue to grow, businesses are seeking larger amounts of capital to finance their operations. This has led to a rise in loan applications and approvals, as banks compete to attract borrowers. Additionally, there has been a growing trend of businesses using multiple banks to secure financing, in order to diversify their risk and access a wider range of funding options. Another trend in the market is the growing interest in venture capital funding. Southeast Asia has seen a surge in startup activity in recent years, with many entrepreneurs looking to secure funding from venture capital firms. This has been fueled by the region's growing tech sector and the success of companies like Grab and Gojek. Venture capital firms are increasingly investing in Southeast Asian startups, providing them with the necessary capital to scale their operations and expand into new markets.

Local special circumstances: One of the unique aspects of the Traditional Capital Raising market in Southeast Asia is the presence of government-backed financing programs. Many countries in the region have established initiatives to support small and medium-sized enterprises (SMEs), providing them with access to affordable financing options. These programs often offer low-interest loans and grants to eligible businesses, helping to stimulate economic growth and promote entrepreneurship.

Underlying macroeconomic factors: The growth of the Traditional Capital Raising market in Southeast Asia can be attributed to several underlying macroeconomic factors. The region has experienced strong economic growth in recent years, driven by factors such as rising consumer spending, increasing foreign direct investment, and a growing middle class. This has created a favorable business environment, making Southeast Asia an attractive destination for investors and lenders. Additionally, the region's governments have implemented policies to promote entrepreneurship and attract foreign investment. This includes initiatives to streamline business registration and licensing processes, as well as tax incentives for businesses. These policies have helped to create a supportive ecosystem for traditional capital raising activities, further fueling the growth of the market. In conclusion, the Traditional Capital Raising market in Southeast Asia is developing rapidly due to customer preferences for traditional financing methods, such as bank loans and venture capital funding. The market is characterized by a growing demand for bank loans and increasing interest in venture capital funding. The presence of government-backed financing programs and favorable macroeconomic factors have also contributed to the growth of the market in the region.

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.