Market Insights Financial Capital Raising Traditional Capital Raising

Venture Debt - Southeast Asia

Southeast Asia

The total capital raised in the Venture Debt market market in Southeast Asia is projected to reach US$4.1bn in 2024.
Traditional Venture Debt is set to dominate the market with a projected market volume of US$4.0bn in 2024.
When compared globally, the United States is expected to generate the most capital raised (US$31,850.0m in 2024).
In Southeast Asia, Venture Debt is gaining traction among startups as an alternative fundraising option to equity financing in the Capital Raising market.

Key regions: India, United Kingdom, China, Europe, Israel

Market

Region

Region comparison

Currency

Analyst Opinion

The Venture Debt market in Southeast Asia has been experiencing significant growth in recent years, driven by several key factors.

Customer preferences: Entrepreneurs and startups in Southeast Asia have shown a growing preference for Venture Debt as a financing option. This is due to the flexibility it offers compared to traditional equity financing. Venture Debt allows companies to access capital without diluting their ownership stakes, which is particularly attractive for founders who want to retain control of their businesses. Additionally, Venture Debt provides startups with a non-dilutive source of funding that can be used to fuel growth and expansion plans.

Trends in the market: One of the key trends in the Venture Debt market in Southeast Asia is the increasing number of venture capital-backed startups seeking debt financing. As the startup ecosystem in the region 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 startups to access the funds they need while minimizing dilution for existing shareholders. Another trend in the market is the emergence of specialized Venture Debt providers. Traditional banks have historically dominated the debt financing landscape, but they often have stringent lending criteria that may not be suitable for startups. As a result, specialized Venture Debt providers have emerged to cater specifically to the needs of the startup community. These providers have a deep understanding of the unique challenges faced by startups and are able to offer more flexible and tailored financing solutions.

Local special circumstances: Southeast Asia is a diverse region with varying levels of development across different countries. While Singapore has established itself as a leading startup hub in the region, other countries such as Indonesia and Vietnam are also experiencing rapid growth in their startup ecosystems. Each country has its own unique set of circumstances and challenges, which can influence the development of the Venture Debt market. For example, Singapore's well-developed financial ecosystem and supportive government policies have created a conducive environment for Venture Debt providers to thrive. On the other hand, countries with less developed financial infrastructure may face challenges in attracting Venture Debt providers and providing startups with access to debt financing.

Underlying macroeconomic factors: The growth of the Venture Debt market in Southeast Asia is also influenced by underlying macroeconomic factors. The region has experienced strong economic growth in recent years, which has fueled the expansion of the startup ecosystem. Additionally, the increasing availability of capital from both domestic and international investors has provided startups with more options for financing. Moreover, the rise of technology and digitalization has created new business opportunities and attracted investments in sectors such as e-commerce, fintech, and logistics. These factors have contributed to the growth of the Venture Debt market as startups seek capital to capitalize on these opportunities and scale their operations.

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.