Venture Debt - Portugal | Statista Market Forecast

The total capital raised in the Venture Debt market market in Portugal is projected to reach US$12.97m in 2024.
Traditional Venture Debt dominates the market in Portugal with a projected market volume of US$12.97m in 2024.
In global comparison, most capital raised will be generated the United States (US$22.4bn in 2024).
Portugal's Venture Debt market is gaining traction among startups seeking alternative capital raising options in a dynamic 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.

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Venture Capital
Venture Debt funds are sponsors by governments

The Venture Debt market in Portugal is experiencing significant growth and development in recent years.

Customer preferences: Portuguese entrepreneurs and startups are increasingly turning to venture debt as a financing option for their businesses. 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 offers a flexible and non-dilutive financing solution, allowing entrepreneurs to access funds without giving up equity in their companies.

Trends in the market: One of the key trends in the Venture Debt market in Portugal is the increasing number of venture capital-backed startups seeking debt financing. As the startup ecosystem in Portugal continues to mature, more companies are reaching a stage where they require additional capital to scale their operations. Venture debt provides an attractive alternative to equity financing, allowing these startups to access the funds they need while minimizing dilution for existing shareholders. Another trend in the market is the growing interest from international venture debt providers in the Portuguese market. As Portugal's startup ecosystem gains recognition and attracts foreign investment, venture debt providers from around the world are expanding their operations to capitalize on the opportunities. This influx of international players is increasing competition in the market and driving innovation in the types of debt products and services available to Portuguese entrepreneurs.

Local special circumstances: Portugal's favorable business environment and supportive government policies have also contributed to the growth of the Venture Debt market. The government has implemented various initiatives to promote entrepreneurship and innovation, including tax incentives and grants for startups. These measures have created a conducive environment for startups to thrive and attract venture debt financing. Additionally, Portugal's strong ties to the European Union and its access to EU funding programs have further bolstered the Venture Debt market. Startups in Portugal can benefit from EU grants and loans, which provide additional capital to support their growth and development. This access to European funding sources has attracted both local and international venture debt providers to the Portuguese market.

Underlying macroeconomic factors: The overall economic stability and positive growth outlook in Portugal have also played a role in the development of the Venture Debt market. Portugal has experienced steady economic growth in recent years, and its GDP per capita has been increasing. This economic stability has created a favorable investment climate and increased investor confidence in the country's startup ecosystem. Furthermore, Portugal's strategic location and strong ties to the European market make it an attractive destination for foreign investment. The country's membership in the European Union and its participation in the Eurozone provide access to a large and integrated market. This has not only attracted venture debt providers but also increased the availability of capital for Portuguese startups. In conclusion, the Venture Debt market in Portugal is experiencing significant growth and development, driven by customer preferences for non-dilutive financing options, the increasing number of venture capital-backed startups, and the entry of international players. The country's favorable business environment, supportive government policies, and access to European funding programs have further contributed to this growth. Additionally, Portugal's economic stability and strategic location make it an attractive destination for venture debt providers and investors.

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.