Venture debt demand rises as firms delay IPOs
Private companies are staying private longer. Thatās pushing more of them toward growth and venture debt.
In the U.S., these loans totaled $35B in 2024. Europe hit ā¬17B, growing over 25% YoY. Average deal sizes there rose to ā¬1.7M, showing a maturing market.
The appeal is clear. Capital without dilution. Flexibility in drawdown. Predictability in returns. Plus, lenders benefit from senior-secured terms, equity kickers, and monthly cash flows.
Whatās changed is the lender landscape. After regional banks stepped back in 2023, private debt managers filled the gap. Today, theyāre better placed to negotiate terms and structure loans with downside protection.
This shift matters. Especially in Europe, where fragmentation and legal complexity keep barriers high. Local relationships now mean more than balance sheet size.
The macro forces are also aligned. Equity is expensive. Market exits are delayed. And investors still have dry powder to deploy. That makes venture debt a practical bridgeāand a strategic one.
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