Venture Debt - Austria | Statista Market Forecast

The country in Austria is expected to see Total Capital Raised in the Venture Debt market market reaching US$81.09m by 2024.
Growth Venture Debt leads the market with a projected market volume of US$44.30m in 2024.
When compared globally, the United States will generate the most Capital Raised (US$22.4bn in 2024).
Austria's Venture Debt market is gaining traction, offering alternative financing options for capital-raising among startups seeking non-dilutive funding solutions.

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 Austria is experiencing significant growth and development in recent years.

Customer preferences: Austrian entrepreneurs and startups are increasingly turning to venture debt as a financing option. This is driven by several factors, including the desire to maintain ownership and control of their businesses, as well as the need for additional capital to fuel growth. Venture debt offers a flexible and non-dilutive source of funding, allowing companies to access the capital they need without giving up equity.

Trends in the market: One of the key trends in the Austrian Venture Debt market is the increasing number of venture capital-backed startups that are opting for debt financing. These startups often have strong growth potential but may not yet have reached a stage where they are generating significant revenue. Venture debt allows them to bridge the gap between equity funding rounds and provides them with the necessary capital to scale their operations. Another trend in the market is the growing interest from traditional financial institutions in providing venture debt. Banks and other lenders are recognizing the potential of the startup ecosystem in Austria and are actively seeking to support these companies through debt financing. This trend is driven by the attractive risk-return profile of venture debt, as well as the potential for long-term relationships with high-growth companies.

Local special circumstances: Austria has a vibrant startup ecosystem, with a number of successful companies emerging in recent years. This has created a supportive environment for venture debt, as entrepreneurs and investors become more familiar with the concept and its benefits. Additionally, the Austrian government has implemented several initiatives to support startups, including tax incentives and grants, which further contribute to the growth of the Venture Debt market.

Underlying macroeconomic factors: The growth of the Venture Debt market in Austria can be attributed to several underlying macroeconomic factors. Firstly, the low interest rate environment has made debt financing more attractive for startups, as they can access capital at relatively low costs. Secondly, the availability of capital from both domestic and international investors has increased, providing startups with more options for funding. Finally, the overall economic stability and favorable business environment in Austria have created a conducive environment for startups to thrive, leading to increased demand for venture debt.

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.