Venture Debt - Argentina | Statista Market Forecast

Argentina's Total Capital Raised in the Venture Debt market market is expected to reach US$17.04m in 2024.
Traditional Venture Debt leads the market with a projected market volume of US$14.46m in 2024.
When compared globally, the United States is anticipated to generate the most Capital Raised (US$22.4bn in 2024).
In Argentina, the Venture Debt market is gaining traction as startups seek alternative capital raising options amidst economic uncertainties.

Definition:

The Venture Debt market refers to a form of equity and debt financing combination, which is used to finance early stage and growth stage capital-backed companies. Besides equity funding rounds, business can seek venture debt that minimizes ownership dilution and governance requirements to increase the cash runway to reach the next milestone or even provide a cushion for delays.

Structure:

The market consists of two segments:
- The Traditional Venture Debt market refers to a form of debt financing that is often provided to venture-backed companies to either buy new equipment, meet a deficiency of short-term capital, or support expansion plans.
- The Growth Venture Debt market refers to a form of debt financing that is often structured with warrants or options, which provides a rapid development stage in which businesses can support their long-term oriented growth plans.
The market data comprises of the amount of capital raised, number of deals, and average deal size.

Key players in this market are companies such as Wells Fargo and Hercules Capital.

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Venture Capital
Venture Debt funds are sponsors by governments

The Venture Debt market in Argentina has been experiencing significant growth in recent years, driven by customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Customer preferences in Argentina have played a crucial role in the development of the Venture Debt market.

Entrepreneurs and startups in the country are increasingly turning to venture debt as an alternative financing option to traditional equity funding. This is primarily due to the flexibility and lower dilution associated with venture debt, allowing entrepreneurs to maintain a larger stake in their companies while still accessing the necessary capital for growth. Additionally, venture debt offers a quicker and less complex funding process compared to equity financing, which is particularly appealing to startups looking for rapid access to capital.

Trends in the market have also contributed to the growth of the Venture Debt market in Argentina. The country has seen a surge in entrepreneurial activity in recent years, with a growing number of startups emerging across various industries. This has created a demand for alternative financing options, such as venture debt, to support the expansion plans of these startups.

Furthermore, venture capital investors in Argentina are increasingly recognizing the value of venture debt as a complementary financing tool, leading to a greater availability of venture debt funding in the market. Local special circumstances have also played a role in the development of the Venture Debt market in Argentina. The country has a vibrant and dynamic startup ecosystem, with a supportive regulatory environment and a growing network of incubators, accelerators, and venture capital funds.

These factors have created a favorable ecosystem for venture debt providers, attracting both domestic and international players to enter the market. Additionally, the government of Argentina has implemented various initiatives to promote entrepreneurship and innovation, further fueling the demand for venture debt financing. Underlying macroeconomic factors have also contributed to the growth of the Venture Debt market in Argentina.

The country has experienced periods of economic volatility and currency depreciation, making traditional debt financing more expensive and less accessible for startups. In such an environment, venture debt has emerged as an attractive alternative, providing startups with access to capital at competitive rates. Furthermore, the low interest rate environment globally has made venture debt a more affordable financing option for both startups and venture debt providers.

In conclusion, the Venture Debt market in Argentina has been growing rapidly due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. As the startup ecosystem continues to thrive and the demand for alternative financing options remains strong, the Venture Debt market in Argentina is expected to continue its upward trajectory in the coming years.

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.