Venture Debt - Iran | Statista Market Forecast

The country in Iran is projected to have a Total Capital Raised in the Venture Debt market market reaching US$2.68m by 2024.
Traditional Venture Debt is expected to dominate the country's market with a projected volume of US$2.68m in 2024.
In global comparison, the United States is anticipated to generate the most Capital Raised, amounting to US$22.4bn in 2024.
Iran's Venture Debt market shows promising growth potential, attracting local startups seeking alternative capital raising options in a challenging economic environment.

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 Iran is experiencing significant growth and development. Customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors all contribute to this positive trajectory.

Customer preferences in Iran are shifting towards alternative financing options, such as Venture Debt, due to the increasing number of startups and the need for capital to fuel their growth. Startups in Iran are often in the early stages of development and may not have access to traditional bank loans or equity financing. Venture Debt provides an attractive solution as it allows startups to access capital without diluting their ownership stakes.

Additionally, Venture Debt offers flexible repayment terms and lower interest rates compared to traditional debt financing options. Trends in the Venture Debt market in Iran reflect the growing demand for this type of financing. More and more startups are opting for Venture Debt as a means to fund their operations and expand their businesses.

This trend is driven by the rising number of entrepreneurial ventures in the country, as well as the increasing interest from investors in supporting these startups. Venture Debt is seen as a viable alternative to equity financing, allowing startups to secure capital while retaining control over their companies. Local special circumstances in Iran also contribute to the development of the Venture Debt market.

The country has a young and vibrant entrepreneurial ecosystem, with a large number of startups emerging in various industries. This entrepreneurial spirit is supported by government initiatives and policies aimed at promoting innovation and entrepreneurship. The availability of Venture Debt as a financing option further fuels this ecosystem, providing startups with the necessary resources to thrive and grow.

Underlying macroeconomic factors also play a role in the growth of the Venture Debt market in Iran. The country has experienced economic challenges in recent years, including inflation and currency devaluation. These factors have made traditional debt financing more expensive and less accessible for startups.

Venture Debt offers a more affordable and flexible financing option, making it an attractive choice for both entrepreneurs and investors. In conclusion, the Venture Debt market in Iran is developing rapidly due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The increasing number of startups, the need for alternative financing options, and the supportive entrepreneurial ecosystem all contribute to the growth of Venture Debt in Iran.

This market is expected to continue expanding as more startups recognize the benefits of this financing option and as investors show increasing interest in supporting these ventures.

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.