Traditional Capital Raising - Uganda

The country in Uganda is expected to see Total Capital Raised in the Traditional Capital Raising market market reach US$98.55m in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$96.77m in 2024.
When compared globally, most Capital Raised is forecasted to be generated the United States (US$159.0bn in 2024).
In Uganda, the trend of utilizing traditional capital raising methods like bank loans and private equity for capital raising remains prevalent in the market.

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 Uganda has been experiencing significant growth in recent years.

Customer preferences: Ugandan entrepreneurs and businesses have shown a strong preference for traditional capital raising methods, such as bank loans and venture capital investments. This is due to the lack of awareness and limited access to alternative financing options, such as crowdfunding or angel investing. Additionally, traditional capital raising methods provide a sense of security and stability for both the borrowers and lenders.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Uganda is the increasing number of small and medium-sized enterprises (SMEs) seeking funding. These businesses are looking to expand their operations and invest in new technologies, but often face challenges in accessing capital. As a result, there has been a rise in the demand for bank loans and venture capital investments. Another trend in the market is the growing interest from foreign investors. Uganda's stable political environment and favorable investment climate have attracted foreign investors looking to capitalize on the country's potential for economic growth. These investors are actively seeking opportunities to invest in promising Ugandan businesses, which has further fueled the growth of the Traditional Capital Raising market.

Local special circumstances: Uganda has a relatively underdeveloped financial sector, with limited access to formal banking services in rural areas. This has led to a reliance on traditional capital raising methods, as they are more accessible to a wider range of businesses and individuals. Additionally, cultural factors play a role in the preference for traditional capital raising, as Ugandans tend to value personal relationships and trust when conducting business transactions.

Underlying macroeconomic factors: The economic growth of Uganda has been a driving force behind the development of the Traditional Capital Raising market. The country has experienced steady GDP growth in recent years, which has created a favorable business environment and increased the demand for capital. Additionally, the government has implemented policies to promote entrepreneurship and attract foreign investment, further stimulating the growth of the market. In conclusion, the Traditional Capital Raising market in Uganda is growing due to customer preferences for traditional financing methods, the increasing number of SMEs seeking funding, the interest from foreign investors, limited access to alternative financing options, and the favorable macroeconomic factors. As the market continues to develop, it is expected that there will be further advancements in traditional capital raising methods and an increased focus on expanding access to alternative financing options.

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.