Venture Debt - Cambodia | Statista Market Forecast

The country in Cambodia is expected to see the Total Capital Raised in the Venture Debt market market reach US$6.68m by 2024.
Traditional Venture Debt is set to maintain dominance in Cambodia, with a projected market volume of US$6.68m in 2024.
When compared globally, the United States will lead in Capital Raised, with an estimated US$22.4bn in 2024.
In Cambodia, Venture Debt is gaining traction as a strategic alternative for capital raising among emerging startups in the tech sector.

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 Cambodia is experiencing significant growth and development.

Customer preferences: Cambodian entrepreneurs and start-ups are increasingly turning to venture debt as a financing option. This is driven by the desire to retain ownership and control over their businesses, as well as the need for flexible and non-dilutive capital. Venture debt allows them to access funds without giving up equity, which is particularly attractive for early-stage companies that may not have significant assets or cash flow. Additionally, venture debt offers a faster and more streamlined process compared to traditional bank loans, making it an appealing choice for entrepreneurs looking for quick access to capital.

Trends in the market: One of the key trends in the Venture Debt market in Cambodia is the growing number of venture debt providers entering the market. As the start-up ecosystem in Cambodia continues to mature, there is an increasing demand for alternative financing options. This has led to the emergence of new venture debt funds and lenders, both local and international, who are eager to tap into this growing market. These players are offering tailored financing solutions and competitive interest rates to attract entrepreneurs and start-ups. Another trend in the market is the diversification of venture debt products. While traditional venture debt typically involves a loan with interest payments, there is now a wider range of products available in Cambodia. For example, revenue-based financing has gained popularity, where repayment is based on a percentage of the company's revenue. This allows start-ups to align their repayment schedule with their cash flow, providing greater flexibility.

Local special circumstances: Cambodia's growing tech and start-up ecosystem is a key driver of the Venture Debt market. The country has seen a surge in the number of tech start-ups in recent years, supported by government initiatives and a young and tech-savvy population. These start-ups are focused on various sectors, including e-commerce, fintech, and agritech, and are attracting attention from local and international investors. Furthermore, Cambodia's proximity to regional markets, such as Thailand and Vietnam, presents opportunities for start-ups to expand their operations beyond the domestic market. This potential for growth and scalability is attractive to venture debt providers, as it increases the likelihood of a successful investment.

Underlying macroeconomic factors: The Venture Debt market in Cambodia is also influenced by macroeconomic factors. Cambodia has experienced steady economic growth in recent years, driven by sectors such as construction, manufacturing, and tourism. This growth has created a favorable business environment for start-ups and has increased investor confidence in the market. Additionally, the government has implemented policies to support entrepreneurship and innovation. Initiatives such as tax incentives, funding programs, and the establishment of incubators and accelerators have contributed to the growth of the start-up ecosystem and the demand for venture debt. In conclusion, the Venture Debt market in Cambodia is experiencing significant growth and development. Cambodian entrepreneurs and start-ups are increasingly turning to venture debt as a financing option, driven by the desire for non-dilutive capital and flexible financing solutions. The market is characterized by the emergence of new venture debt providers and a diversification of products. The country's growing tech and start-up ecosystem, favorable macroeconomic factors, and government initiatives to support entrepreneurship are key drivers of this market growth.

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.