Venture Debt - Panama | Statista Market Forecast

The country in Panama is projected to see a Total Capital Raised in the Venture Debt market market of US$222.90k in 2024.
Traditional Venture Debt is set to dominate the market with a projected market volume of US$222.90k in 2024.
In global comparison, the United States is expected to generate the most Capital Raised with US$22.4bn in 2024.
Panama's Venture Debt market is gaining traction among startups seeking alternative financing options to fuel their growth in the Capital Raising sector.

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 Panama is experiencing significant growth and development due to various factors.

Customer preferences: Panamanian businesses are increasingly turning to venture debt as a financing option. This is driven by the desire to access capital without diluting equity ownership. Many entrepreneurs in Panama are looking to maintain control of their companies while still securing the funds needed for growth. Venture debt offers a flexible and attractive alternative to traditional equity financing, allowing businesses to access capital without giving up ownership stakes.

Trends in the market: One of the key trends in the Venture Debt market in Panama is the rise of startup activity. Panama has seen a surge in entrepreneurial activity in recent years, with a growing number of startups emerging across various industries. These startups often require additional capital to fuel their growth, and venture debt provides a viable financing option. Another trend in the market is the increasing availability of venture debt providers in Panama. As the demand for venture debt grows, more lenders are entering the market to meet the needs of businesses. This competition among lenders is driving innovation in the sector and leading to more favorable terms for borrowers.

Local special circumstances: Panama's strategic location as a hub for international trade and commerce has attracted significant foreign investment. This has created a favorable business environment and has contributed to the growth of the Venture Debt market. Additionally, Panama's strong legal framework and stable political climate provide a level of security and confidence for lenders and borrowers.

Underlying macroeconomic factors: Panama's strong economic growth and stability have played a significant role in driving the development of the Venture Debt market. The country has experienced consistent GDP growth in recent years, and its favorable business climate has attracted both domestic and foreign investors. This economic stability provides a solid foundation for the Venture Debt market to thrive. Furthermore, Panama's favorable tax environment and access to international financial markets make it an attractive destination for venture debt providers. The country's strategic position as a financial center in the region allows lenders to tap into a diverse pool of borrowers and opportunities. In conclusion, the Venture Debt market in Panama is experiencing significant growth and development due to customer preferences for non-dilutive financing options, the rise of startup activity, the increasing availability of venture debt providers, Panama's favorable business environment, and its strong macroeconomic factors. As the market continues to evolve, it is expected that venture debt will play an increasingly important role in supporting the growth and expansion of businesses in Panama.

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.