Venture Debt - Thailand | Statista Market Forecast

The total capital raised in the Venture Debt market market in Thailand is projected to reach US$74.30m in 2024.
Traditional Venture Debt holds dominance in the market with a projected market volume of US$72.35m in 2024.
In global comparison, the United States is expected to generate the most capital raised, reaching US$22.4bn in 2024.
Thailand's Venture Debt market is gaining momentum as more startups opt for non-dilutive capital raising options to fuel their growth.

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 Thailand has been experiencing significant growth in recent years.

Customer preferences: Thai entrepreneurs and startups are increasingly turning to venture debt as a financing option. This is driven by several factors. Firstly, venture debt offers a way for companies to raise capital without diluting equity, allowing them to retain control and ownership. Secondly, venture debt is often more accessible and easier to obtain compared to traditional bank loans, which have stricter requirements and collateral demands. Additionally, venture debt provides entrepreneurs with the flexibility to use the funds for various purposes, such as expanding operations, investing in research and development, or hiring talent.

Trends in the market: One of the key trends in the Venture Debt market in Thailand is the growing number of venture capital-backed startups. As the startup ecosystem in Thailand continues to mature, more companies are receiving funding from venture capital firms. These startups often require additional capital to support their growth and scale their operations. Venture debt provides a viable solution for these companies to bridge the gap between equity rounds and access the capital they need to fuel their expansion. Another trend in the market is the emergence of specialized venture debt providers. These lenders focus exclusively on providing debt financing to startups and early-stage companies. They understand the unique needs and challenges of these businesses and are able to tailor their loan terms accordingly. This specialization has helped to increase the availability and accessibility of venture debt in Thailand.

Local special circumstances: Thailand has a vibrant startup ecosystem, with a growing number of entrepreneurs and investors. The government has also been supportive of the startup ecosystem, implementing various initiatives and programs to foster innovation and entrepreneurship. This favorable environment has created a conducive atmosphere for the growth of the Venture Debt market in Thailand.

Underlying macroeconomic factors: Thailand's strong economic growth and stability have also contributed to the development of the Venture Debt market. The country has a robust financial sector and a well-regulated banking system, which provides a solid foundation for venture debt providers. Additionally, Thailand's strategic location and connectivity to other markets in Southeast Asia make it an attractive destination for startups and investors alike. In conclusion, the Venture Debt market in Thailand is experiencing growth due to the preferences of entrepreneurs and startups, the emergence of specialized lenders, the supportive local ecosystem, and the underlying macroeconomic factors. As the startup ecosystem continues to mature and the demand for capital increases, the Venture Debt market is expected to further expand and evolve in Thailand.

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.