Venture Debt - Chile | Statista Market Forecast

The country in Chile is expected to see the Total Capital Raised in the Venture Debt market market reach US$7.38m by 2024.
When looking at the market, Growth Venture Debt is set to lead with a projected market volume of US$4.64m in 2024.
In comparison on a global scale, the United States will generate the most Capital Raised, with US$22.4bn expected in 2024.
Chile's venture debt market is gaining traction among startups as an alternative capital raising avenue, fueled by a growing entrepreneurial ecosystem.

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

Entrepreneurs and startups in the country are increasingly looking for alternative financing options to fuel their growth and expansion plans. Venture Debt offers an attractive solution as it allows companies to access capital without diluting their ownership stakes. This preference for non-dilutive financing has led to a surge in demand for Venture Debt in Chile.

Trends in the market also contribute to the growth of the Venture Debt market in Chile. The country has witnessed a steady increase in the number of startups and entrepreneurial activity in recent years. This rise in entrepreneurship has created a favorable environment for Venture Debt providers, as more companies seek funding to support their innovative ideas and business models.

Additionally, the growing interest from international investors in Chilean startups has further fueled the demand for Venture Debt. Local special circumstances in Chile have also played a role in the development of the Venture Debt market. The country has a vibrant startup ecosystem, with numerous support programs and initiatives aimed at fostering entrepreneurship.

Government initiatives, such as Start-Up Chile, provide funding and resources to early-stage companies, creating a conducive environment for Venture Debt providers to thrive. Furthermore, the presence of venture capital firms and angel investors in Chile has helped to establish a strong ecosystem for startups, driving the demand for Venture Debt. Underlying macroeconomic factors have also contributed to the growth of the Venture Debt market in Chile.

The country has experienced steady economic growth in recent years, with a stable political and regulatory environment. This stability has attracted foreign investors and created a favorable climate for venture capital and debt financing. Additionally, low interest rates and favorable lending conditions have made it easier for startups to access debt financing, further fueling the growth of the Venture Debt market.

In conclusion, the Venture Debt market in Chile has been experiencing significant growth due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The preference for non-dilutive financing, the rise in entrepreneurship, government initiatives, and a stable economic environment have all contributed to the increasing demand for Venture Debt in Chile. As the country's startup ecosystem continues to evolve and expand, it is expected that the Venture Debt market will further develop and play a crucial role in supporting the growth of innovative companies.

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.