Venture Debt - Egypt | Statista Market Forecast

The country in Egypt is projected to have a Total Capital Raised in the Venture Debt market market of US$6.07m in 2024.
Traditional Venture Debt is expected to dominate the market with a projected market volume of US$6.07m in 2024.
In global comparison, the United States will lead in Capital Raised, with US$22.4bn expected in 2024.
Egypt's Venture Debt market shows promising growth potential, attracting more investors seeking alternative capital-raising options in the country's evolving entrepreneurial landscape.

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.

Use the info button next to the boxes for more information on the data displayed.

Venture Capital
Venture Debt funds are sponsors by governments

The Venture Debt market in Egypt has experienced significant growth in recent years, driven by customer preferences for alternative financing options and the local special circumstances of the Egyptian market.

Customer preferences: In Egypt, entrepreneurs and startups are increasingly turning to venture debt as a financing option. This is due to several factors, including the limited availability of traditional bank loans, the high cost of equity financing, and the desire to maintain ownership and control over their companies. Venture debt offers a flexible and non-dilutive source of capital that can be used to fund growth initiatives, such as product development, marketing, and expansion into new markets.

Trends in the market: One of the key trends in the Egyptian Venture Debt market is the emergence of specialized venture debt providers. These companies focus solely on providing debt financing to startups and have a deep understanding of the unique needs and challenges of this market. They offer customized financing solutions and work closely with entrepreneurs to structure deals that align with their business objectives. This trend has increased the availability of venture debt in Egypt and has made it more accessible to startups of all sizes and stages of development. Another trend in the market is the growing interest from international investors in Egyptian startups. This has been driven by the country's strong entrepreneurial ecosystem, which has produced a number of successful tech companies in recent years. International investors see the potential for high returns in the Egyptian market and are willing to provide venture debt financing to support the growth of local startups. This trend has further fueled the growth of the Venture Debt market in Egypt and has provided entrepreneurs with access to a wider range of financing options.

Local special circumstances: The Egyptian market presents unique challenges and opportunities for startups. The country has a large and young population, with a growing middle class that is increasingly tech-savvy and open to adopting new technologies. This provides a large addressable market for startups in sectors such as e-commerce, fintech, and healthcare. However, startups in Egypt also face a number of challenges, including a lack of access to traditional bank financing, limited infrastructure, and a complex regulatory environment. Venture debt has emerged as a viable financing option for startups in Egypt, as it allows them to overcome these challenges and access the capital they need to grow their businesses.

Underlying macroeconomic factors: The growth of the Venture Debt market in Egypt is also influenced by underlying macroeconomic factors. The Egyptian economy has been growing steadily in recent years, supported by government reforms aimed at attracting foreign investment and promoting entrepreneurship. This has created a favorable business environment for startups and has attracted both local and international investors. Additionally, the government has launched initiatives to support the growth of the tech sector, including the establishment of technology parks and incubators. These initiatives have helped to create a vibrant ecosystem for startups and have contributed to the growth of the Venture Debt market in Egypt.

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.