Venture Debt - Peru | Statista Market Forecast

Peru is expected to see the Total Capital Raised in the Venture Debt market market reach US$218.90k by 2024.
Traditional Venture Debt is set to maintain dominance in the market with a projected market volume of US$218.90k in 2024.
In global comparison, the United States will lead in Capital Raised, with US$22.4bn expected in 2024.
Peru's Venture Debt market is gaining momentum as local startups seek alternative funding options beyond traditional equity financing.

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 Peru is experiencing significant growth and development in recent years. This can be attributed to several factors, including customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Peruvian entrepreneurs and startups are increasingly turning to venture debt as a financing option. This is driven by the desire to maintain control and ownership of their businesses while still accessing the necessary capital for growth. Venture debt allows them to raise funds without diluting their equity, which is especially appealing for early-stage companies that have not yet reached a stage where they can attract significant equity investments.

Trends in the market: One of the key trends in the Venture Debt market in Peru is the increasing number of venture capital firms and investors entering the market. This has led to a greater availability of venture debt financing options for entrepreneurs and startups. Additionally, there is a growing awareness and understanding of venture debt as a viable financing alternative, leading to increased demand from entrepreneurs.

Local special circumstances: Peru has a vibrant startup ecosystem, with a number of successful startups emerging in recent years. This has created a favorable environment for venture debt, as entrepreneurs are more willing to explore alternative financing options to fuel their growth. Furthermore, the Peruvian government has implemented policies and initiatives to support entrepreneurship and innovation, which has further contributed to the development of the Venture Debt market.

Underlying macroeconomic factors: Peru has experienced steady economic growth in recent years, which has created a conducive environment for venture debt. A growing economy means more opportunities for entrepreneurs and startups, leading to an increased demand for financing. Additionally, Peru has a stable political environment and a favorable business climate, which attracts both domestic and foreign investors. In conclusion, the Venture Debt market in Peru is developing rapidly due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Entrepreneurs and startups are increasingly turning to venture debt as a financing option, and the market is witnessing the entry of more venture capital firms and investors. Furthermore, Peru's vibrant startup ecosystem, supportive government policies, and favorable macroeconomic conditions contribute to the growth and development of the Venture Debt market in the country.

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.