Market Insights Financial Capital Raising Traditional Capital Raising

Venture Capital - Hong Kong

Hong Kong

The country in Hong Kong is projected to see the Total Capital Raised in the Venture Capital market market reach €1.87bn in 2024.
In the country, Early Stage dominates the market with a projected market volume of €0.90bn in 2024.
When compared globally, the United States is expected to generate the most Capital Raised with €125,300.0m in 2024.
Hong Kong's Venture Capital market is thriving, with a surge in fintech startups attracting significant investor interest and funding.

Key regions: Europe, United States, United Kingdom, Australia, Brazil

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Analyst Opinion

The Venture Capital market in Hong Kong has been experiencing significant growth in recent years, driven by various factors such as customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Hong Kong has become an attractive destination for venture capital investments due to its strategic location and strong business environment. Entrepreneurs and startups are drawn to Hong Kong for its well-established legal system, low tax rates, and access to a wide range of financial services. Additionally, the city's proximity to Mainland China provides opportunities for startups to tap into the vast Chinese market.

Trends in the market: One of the key trends in the Venture Capital market in Hong Kong is the increasing focus on technology and innovation. Startups in sectors such as fintech, e-commerce, and artificial intelligence are receiving significant investments as investors recognize the potential for growth in these industries. This trend is further supported by the government's initiatives to promote Hong Kong as a global hub for innovation and technology. Another trend in the market is the rise of corporate venture capital. Established companies are increasingly setting up their own venture capital arms to invest in startups and gain access to new technologies and business models. This trend is driven by the need for established companies to stay competitive in a rapidly changing business landscape.

Local special circumstances: Hong Kong's unique position as a global financial center and gateway to Mainland China gives it a competitive advantage in attracting venture capital investments. The city's strong legal framework, transparent business environment, and robust intellectual property protection provide a level of stability and security that is attractive to investors. Furthermore, Hong Kong has a vibrant startup ecosystem with a supportive infrastructure and access to a pool of talent. The government has also introduced various initiatives to support startups, such as funding programs, incubators, and co-working spaces. These factors create a conducive environment for startups to thrive and attract venture capital investments.

Underlying macroeconomic factors: The Venture Capital market in Hong Kong is also influenced by underlying macroeconomic factors. The city's strong economic growth, stable political environment, and favorable business climate contribute to investor confidence. Additionally, Hong Kong's proximity to Mainland China and its role as a global financial center make it an attractive destination for venture capital investments. Furthermore, the increasing integration between Hong Kong and Mainland China's financial markets, such as the Stock Connect and Bond Connect programs, provides investors with greater access to investment opportunities in both markets. This integration further enhances Hong Kong's position as a hub for venture capital investments. In conclusion, the Venture Capital market in Hong Kong is experiencing significant growth due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The city's strategic location, strong business environment, and government support for startups have made it an attractive destination for venture capital investments. With the increasing focus on technology and innovation, as well as the rise of corporate venture capital, the market is expected to continue its positive trajectory in the coming years.

Methodology

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.