Venture Debt - Ukraine | Statista Market Forecast

The country in Ukraine is projected to reach a Total Capital Raised of US$12.52m in the Venture Debt market market by 2024.
Traditional Venture Debt is expected to dominate the market with a projected market volume of US$12.16m in 2024.
In global comparison, the United States will generate the most Capital Raised, reaching US$22.4bn in 2024.
In Ukraine, Venture Debt is gaining traction as a flexible financing option for startups navigating the capital raising 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 Ukraine has been experiencing significant growth in recent years, driven by customer preferences and local special circumstances.

Customer preferences: In Ukraine, entrepreneurs and startups are increasingly turning to venture debt as a financing option. This is due to the fact that venture debt allows them to access capital without diluting their ownership stakes. Startups in Ukraine are often cash-constrained and may not have the collateral or track record to secure traditional bank loans. Venture debt provides them with the necessary funds to scale their operations and invest in growth, while minimizing equity dilution.

Trends in the market: One of the key trends in the Venture Debt market in Ukraine is the increasing number of venture capital-backed startups. The country has seen a rise in venture capital activity, with both local and international investors showing interest in Ukrainian startups. As these startups secure equity funding, they also seek venture debt to complement their capital structure. This trend is expected to continue as the startup ecosystem in Ukraine matures and more companies seek growth financing. Another trend in the market is the emergence of specialized venture debt providers. These providers understand the unique needs and challenges of startups and offer tailored debt solutions. They are able to assess the growth potential of startups and provide financing based on their future cash flows and revenue projections. This trend has increased the availability of venture debt in Ukraine and made it more accessible to startups across various sectors.

Local special circumstances: Ukraine has a vibrant startup ecosystem, with a growing number of innovative companies across sectors such as technology, e-commerce, and fintech. The country's highly skilled workforce, lower operating costs compared to Western Europe, and supportive government policies have attracted both local and international entrepreneurs. This has created a conducive environment for startups to thrive and has contributed to the demand for venture debt.

Underlying macroeconomic factors: The Venture Debt market in Ukraine is also influenced by underlying macroeconomic factors. The country has undergone significant economic and political reforms in recent years, which have improved the business environment and attracted foreign investment. Additionally, Ukraine has a large population and a growing middle class, creating a domestic market for startups to target. These factors have contributed to the overall economic growth and stability, making Ukraine an attractive market for venture debt providers. In conclusion, the Venture Debt market in Ukraine is experiencing growth due to customer preferences, such as the desire to minimize equity dilution, and local special circumstances, including a vibrant startup ecosystem and supportive government policies. The increasing number of venture capital-backed startups and the emergence of specialized venture debt providers are also driving the market. Furthermore, underlying macroeconomic factors, such as economic reforms and a growing domestic market, are contributing to the development of the Venture Debt market in Ukraine.

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.