Market Insights Financial Capital Raising Traditional Capital Raising

Venture Debt - India

India

The projected Total Capital Raised in the Venture Debt market market in India is expected to reach €556.40m in 2024.
Traditional Venture Debt remains dominant in the market with a projected market volume of €522.40m in 2024.
When compared globally, the United States is anticipated to generate the most Capital Raised (€20,780.0m in 2024).
In India, the Venture Debt market is gaining traction among startups seeking alternative financing options for growth and expansion.

Key regions: Brazil, Germany, United Kingdom, Singapore, China

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Analyst Opinion

Venture Debt is a growing market in India, driven by the increasing demand for alternative funding options among startups and small businesses. This form of financing allows companies to raise capital without diluting their equity, making it an attractive option for entrepreneurs looking to scale their businesses.

Customer preferences: Startups and small businesses in India are increasingly turning to venture debt as a way to fund their growth. This is mainly due to the fact that venture debt provides an alternative to traditional equity financing, allowing companies to raise capital while minimizing dilution of ownership. Additionally, venture debt offers more flexibility in terms of repayment schedules and interest rates compared to traditional bank loans.

Trends in the market: One of the key trends in the venture debt market in India is the increasing number of venture debt providers. As the demand for this form of financing grows, more specialized lenders are entering the market, offering tailored financing solutions to startups and small businesses. This increased competition is driving innovation in the industry, with lenders offering more flexible terms and lower interest rates to attract customers. Another trend in the market is the growing interest from international investors in Indian startups. With India being one of the fastest-growing startup ecosystems in the world, international investors are looking to capitalize on the opportunities in the market. Venture debt provides a way for these investors to participate in the growth of Indian startups, while also mitigating some of the risks associated with equity investments.

Local special circumstances: India has a vibrant startup ecosystem, with a large number of companies operating in sectors such as technology, e-commerce, and fintech. These startups often face unique challenges when it comes to raising capital, as traditional lenders may be hesitant to provide funding to companies with limited operating history or unconventional business models. Venture debt fills this gap by offering a financing option that is tailored to the needs of startups, providing them with the capital they need to scale their businesses.

Underlying macroeconomic factors: The venture debt market in India is also influenced by macroeconomic factors such as the overall economic growth of the country and the availability of capital. As India continues to experience strong economic growth, there is an increasing demand for capital from startups and small businesses. Additionally, the government of India has launched several initiatives to promote entrepreneurship and innovation, which has further fueled the growth of the startup ecosystem in the country. In conclusion, the venture debt market in India is experiencing significant growth, driven by the increasing demand for alternative financing options among startups and small businesses. This trend is likely to continue as more specialized lenders enter the market and international investors show interest in Indian startups. The local special circumstances, such as the vibrant startup ecosystem and government initiatives to promote entrepreneurship, further contribute to the growth of the market. Overall, the venture debt market in India is poised for further expansion in the coming years.

Methodology

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.