Traditional Capital Raising - Worldwide

The Total Capital Raised in the Traditional Capital Raising market market worldwide is expected to reach US$322.90bn in 2024.
Venture Capital is set to lead the market with a projected volume of US$279.80bn in 2024.
When compared globally, the United States is anticipated to generate the highest Capital Raised amount ( US$159.0bn in 2024).
In the traditional capital raising market worldwide, the United States continues to lead with innovative financial instruments and robust regulatory frameworks.

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 is experiencing significant growth and development worldwide.

Customer preferences: Customers in the Traditional Capital Raising market are increasingly seeking out alternative sources of funding for their businesses. This is driven by a desire to diversify their funding options and reduce their reliance on traditional banking institutions. Additionally, customers are becoming more comfortable with the idea of crowdfunding and peer-to-peer lending, as they offer a more democratic and inclusive approach to capital raising.

Trends in the market: One of the key trends in the Traditional Capital Raising market is the rise of crowdfunding platforms. These platforms allow individuals and businesses to raise capital from a large number of investors, often in exchange for equity or other forms of ownership. This trend is particularly evident in countries with robust entrepreneurial ecosystems, where startups and small businesses are seeking alternative sources of funding to fuel their growth. Another trend in the market is the increasing use of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, cutting out the middleman and reducing the cost of borrowing. This trend is driven by the growing demand for affordable and accessible credit, particularly among individuals and small businesses that may have difficulty obtaining loans from traditional banks.

Local special circumstances: In the United States, the Traditional Capital Raising market is experiencing significant growth due to the passage of the JOBS Act in 2012. This legislation relaxed restrictions on crowdfunding and allowed non-accredited investors to participate in private offerings. As a result, crowdfunding platforms have flourished in the US, providing a new avenue for entrepreneurs and small businesses to raise capital. In China, the Traditional Capital Raising market is driven by the rapid growth of the internet and mobile technology. Online crowdfunding platforms have gained popularity, particularly among young and tech-savvy investors. Additionally, the Chinese government has been supportive of the crowdfunding industry, providing regulatory clarity and creating a conducive environment for growth.

Underlying macroeconomic factors: The development of the Traditional Capital Raising market is also influenced by underlying macroeconomic factors. For example, low interest rates in many countries have made traditional bank lending less attractive, leading businesses and individuals to seek alternative sources of funding. Additionally, the global rise of entrepreneurship and the gig economy have created a growing demand for flexible and innovative funding solutions. In conclusion, the Traditional Capital Raising market is experiencing significant growth and development worldwide. Customers are increasingly seeking out alternative sources of funding, such as crowdfunding and peer-to-peer lending platforms. This trend is driven by a desire to diversify funding options and reduce reliance on traditional banks. Local special circumstances, such as regulatory changes and technological advancements, are also contributing to the growth of the market in specific countries. Underlying macroeconomic factors, such as low interest rates and the rise of entrepreneurship, are further fueling the development of the market.

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.