Market Insights Financial Capital Raising Traditional Capital Raising

Venture Debt - South Korea

South Korea

The total capital raised in the Venture Debt market market in South Korea is projected to reach €238.40m in 2024.
Traditional Venture Debt dominates the market in South Korea with a projected market volume of €237.50m in 2024.
In global comparison, the United States is expected to generate the most capital raised with €20,780.0m in 2024.
South Korea's Venture Debt market is gaining traction among startups seeking alternative financing options to fuel their growth in the Capital Raising sector.

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

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Analyst Opinion

South Korea, known for its advanced technology and innovation, has seen a significant development in its Venture Debt market in recent years.

Customer preferences: The growing popularity of Venture Debt in South Korea can be attributed to the preferences of local entrepreneurs and startups. With limited access to traditional bank loans and a strong aversion to diluting equity, entrepreneurs are increasingly turning to Venture Debt as a financing option. This allows them to raise capital without giving up ownership and control of their companies, which is highly valued in the South Korean business culture.

Trends in the market: One of the key trends in the Venture Debt market in South Korea is the increasing number of alternative lenders and specialized funds entering the market. These lenders offer customized debt solutions tailored to the needs of startups and high-growth companies. This trend is driven by the recognition of the potential for high returns in the South Korean startup ecosystem and the increasing demand for non-dilutive financing options. Another trend in the market is the rise of strategic partnerships between Venture Debt providers and venture capital firms. This collaboration allows startups to access both debt and equity financing, providing them with a more comprehensive funding solution. Additionally, this trend helps Venture Debt providers mitigate risk by aligning their interests with those of the venture capital firms.

Local special circumstances: South Korea's strong emphasis on innovation and technology has created a favorable environment for the growth of the Venture Debt market. The country has a robust startup ecosystem, with government support and initiatives aimed at fostering entrepreneurship and innovation. This has led to the emergence of a vibrant community of startups and high-growth companies that are in need of capital to fuel their growth. Furthermore, South Korea's well-developed infrastructure and advanced technology sector provide a solid foundation for startups to thrive. The country is home to several leading tech companies and has a highly skilled workforce, making it an attractive destination for venture capital investment. This, in turn, drives the demand for Venture Debt as startups seek to scale their operations and bring their innovative products and services to market.

Underlying macroeconomic factors: The Venture Debt market in South Korea is also influenced by macroeconomic factors. The country's low interest rate environment, coupled with ample liquidity in the financial system, has made debt financing an attractive option for startups. Additionally, the government's efforts to promote entrepreneurship and innovation through various policies and incentives have further fueled the growth of the Venture Debt market. In conclusion, the Venture Debt market in South Korea has experienced significant growth due to the preferences of local entrepreneurs, the emergence of alternative lenders, strategic partnerships, favorable local circumstances, and underlying macroeconomic factors. As the country continues to prioritize innovation and technology, the Venture Debt market is expected to further expand, providing startups with the necessary capital to fuel their growth and contribute to the country's economic development.

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.