Venture Debt - Jordan | Statista Market Forecast

Total Capital Raised in Jordan's Venture Debt market market is expected to reach US$2.43m in 2024.
Traditional Venture Debt holds the majority share in the market with a projected market volume of US$2.43m in 2024.
When compared on a global scale, the United States is poised to generate the highest Capital Raised (US$22.4bn in 2024).
Jordan's growing tech sector is driving an increased demand for venture debt, offering a unique investment opportunity in the capital raising market.

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 Jordan is experiencing significant growth and development in recent years.

Customer preferences: Entrepreneurs in Jordan are increasingly turning to venture debt as a financing option for their startups. This is driven by several factors, including the desire to maintain ownership and control of their companies, as well as the need for additional capital to fuel growth. Venture debt allows entrepreneurs to access the funding they need without diluting their equity stake, making it an attractive option for many startups in Jordan.

Trends in the market: One of the key trends in the Venture Debt market in Jordan is the increasing availability of venture debt financing options. As the startup ecosystem in Jordan continues to grow and mature, more financial institutions and venture debt funds are entering the market, offering a range of financing options tailored to the needs of startups. This increased competition is driving down the cost of capital and making venture debt more accessible to a wider range of entrepreneurs. Another trend in the market is the growing interest from international investors in the Jordanian startup ecosystem. Jordan has a reputation for producing innovative startups in sectors such as technology, e-commerce, and fintech, attracting the attention of venture capital firms and other investors from around the world. This influx of international capital is further fueling the growth of the Venture Debt market in Jordan, as these investors seek to provide additional financing options to support the growth of local startups.

Local special circumstances: Jordan has a supportive regulatory environment for startups, with government initiatives and incentives aimed at promoting entrepreneurship and innovation. This includes the establishment of startup incubators and accelerators, as well as the provision of grants and tax incentives for startups. These initiatives have created a conducive environment for startups to thrive and attract investment, including venture debt financing.

Underlying macroeconomic factors: The Venture Debt market in Jordan is also influenced by broader macroeconomic factors. The country has a young and dynamic population, with a high level of education and technological literacy. This has created a fertile ground for the development of innovative startups and a vibrant entrepreneurial ecosystem. Additionally, Jordan benefits from its strategic location in the Middle East, providing access to regional markets and opportunities for startups to scale and expand. In conclusion, the Venture Debt market in Jordan is experiencing significant growth and development, driven by customer preferences for maintaining ownership and control, increasing availability of financing options, growing interest from international investors, supportive regulatory environment, and underlying macroeconomic factors. These factors are contributing to the expansion of the Venture Debt market and the continued success of startups in Jordan.

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.