Venture Debt - Cyprus | Statista Market Forecast

The country in Cyprus is expected to see a Total Capital Raised in the Venture Debt market market reaching US$378.20k in 2024.
Traditional Venture Debt is set to dominate the market with a projected market volume of US$378.20k in 2024 withCyprus.
When compared globally, the United States is anticipated to generate the most Capital Raised, amounting to US$22.4bn in 2024.
Cyprus's Venture Debt market is gaining traction among startups seeking alternative financing options for expansion and growth.

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

Venture Debt market in Cyprus has been witnessing a steady growth in recent years, driven by various factors.

Customer preferences: Entrepreneurs in Cyprus are increasingly turning to venture debt as a financing option for their startups. This is mainly due to the flexibility and lower cost of capital compared to equity financing. Startups prefer venture debt as it allows them to retain ownership and control over their businesses while accessing the necessary funds to fuel their growth. Additionally, venture debt provides startups with the much-needed runway to achieve key milestones and attract further funding.

Trends in the market: One of the key trends in the Venture Debt market in Cyprus is the rise of technology startups. Cyprus has seen a surge in tech startups focusing on areas such as fintech, e-commerce, and software development. These startups require capital to invest in technology infrastructure, product development, and market expansion. Venture debt has emerged as an attractive financing option for these startups, enabling them to scale their operations and compete in the global market. Another trend in the market is the increasing participation of international venture debt providers. Cyprus has become an attractive destination for foreign investors due to its favorable business environment, skilled workforce, and strategic location. International venture debt providers are entering the market to tap into the growing demand for financing from local startups. This trend not only provides startups with access to a wider pool of capital but also brings in global expertise and networks, which can be valuable for their growth.

Local special circumstances: Cyprus has a vibrant startup ecosystem, supported by government initiatives and favorable regulations. The government has introduced various measures to encourage entrepreneurship and innovation, including tax incentives, grants, and support programs. These initiatives have created a conducive environment for startups to thrive and attract venture debt financing. Additionally, Cyprus serves as a gateway to the European Union (EU) market, providing startups with access to a large consumer base and potential investors. This strategic advantage has made Cyprus an attractive location for startups looking to expand their operations and attract international capital.

Underlying macroeconomic factors: The Venture Debt market in Cyprus is also influenced by broader macroeconomic factors. The country has experienced steady economic growth in recent years, driven by sectors such as tourism, real estate, and professional services. This has created a favorable investment climate and increased investor confidence, leading to a growing interest in venture debt financing. Furthermore, low interest rates and ample liquidity in the financial system have made borrowing more affordable for startups. This has encouraged entrepreneurs to explore different financing options, including venture debt, to fund their growth plans. In conclusion, the Venture Debt market in Cyprus is witnessing growth due to customer preferences for flexible and cost-effective financing options, the rise of technology startups, the increasing participation of international venture debt providers, favorable government initiatives, strategic location, steady economic growth, and favorable macroeconomic factors. These factors are expected to continue driving the development of the Venture Debt market in Cyprus 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.