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Quote of the day: "Learn to hope in despair, remember the storm when conditions are fair". — AI House Davos.
This content is brought to you in collaboration with Bootstrap Europe, leading venture debt provider in Europe, and member of European Women in VC!
Join us for the upcoming Lunch&Learn session on Feb 7th, 13:00 CET, featuring
Fatou Diagne, Managing Partner & co-founder at Bootstrap Europe,
Iwona Biernat, Investment Officer - Growth Capital & Innovation Finance at European Investment Bank (EIB),
Luis Eduardo Pazmino, Credit Associate at Capchase,
and the host Iwona Cymerman, Managing Partner at FundingBox Deep Tech Fund.
Venture Debt: A growing alternative in uncertain times
At a time of economic uncertainty, the current market cooldown and VCs deploying capital more conservatively, venture debt is on a rise.
For investors, venture debt offers high yields, which is a particularly important given today’s low interest rate environment. But the income potential is just part of the reason why investors should consider adding a venture debt component to their portfolios.
For founders, venture debt provides non-dilutive capital, allowing them to extend runway, fuel growth, and bridge financing gaps without giving up equity or resetting valuations.
How big is the venture debt market in Europe, and where is it headed next?
The state of European Venture Debt: key figures
1. Market Trends & Performance
Venture debt has experienced significant fluctuations in recent years.
Strong Growth, Then a Dip 📉 – The market peaked at €24B (1,293 deals) in 2022, but declined to €14B (863 deals) in 2023 due to rising interest rates and cautious investor sentiment.
2024 Recovery Underway 🚀 – By H1 2024, €17.2B was already allocated across 170 deals, signaling a rebound driven by private credit maturities and stabilizing interest rates.
2024 the best year on record - Due to the changes in interest rate environments, the relative cost of fundraising has gone up, making debt an even more attractive prospect for those startup founders who don't want to give up equity.
Venture Debt’s Expanding Role
The role of venture debt in startup financing has been steadily increasing
Growing Market Share 📊 – Venture debt’s share of the venture capital market rose from 10-15% (2014-2016) to 22-24% (2022-2023), showing its increasing role in startup financing.
Debt as a Key Alternative 💰 – Venture debt is preferred over equity in tough markets because it offers minimal dilution, no valuation reset, and quicker access to funds.
3. Shift Toward Late-Stage Deals
As startups scale, their capital needs evolve, leading to a shift in how venture debt is deployed
Late-Stage Shift 🏗️ – The proportion of late-stage deals grew from 17% (2014-2016) to 24% (2021-2023), reflecting stronger demand from scale-ups.
Collapse of SVB & Market Shifts
The unexpected collapse of Silicon Valley Bank (SVB) triggered a wave of market consolidation and acquisitions as large banks moved to fill the void.
HSBC acquired UK assets, igniting interest from JP Morgan, Stifel, Mitsubishi UFJ, and Deutsche Bank.
Bootstrap Europe acquired SVB’s assets in Germany, now holding the sole continental European venture and growth portfolio of SVB.
BlackRock acquired Kreos Capital, emphasizing a likely long term focus on larger loans.
Deutsche Handelsbank ceased its venture debt activity, expanding the financing gap in the 🇩🇪 German tech ecosystem.
👉 Further insights: One year after SVB’s fall — who banks founders now?
While some gaps have been filled, others remain.
€1-10M Tickets Funding Gap
Debt funding is flowing at the larger end of the spectrum, while the classic €1-10M technology loan segment witnesses a funding gap. As European tech ecosystems adapt to these changes, new opportunities and challenges will emerge. Understanding these dynamics is essential for entrepreneurs seeking funding and investors looking to navigate the evolving landscape.
Venture Debt vs. alternative financing structures
Equity-diluting investor funding it’s not always the ideal choice. In order to find the optimal way to fuel company growth, understanding the nuances between the financing structures is essential.
Types of venture debt financing:
A business line of credit - Short-term, recurring revenue-based credit, lower amounts than VD.
Convertible debt - Short-term, has the potential to convert into equity at a later stage, typically during a subsequent equity financing round.
Growth capital term debt - High-interest fixed-term loans that are repaid over the course of 2 to 4 years.
The European venture debt market is evolving, with several key players shaping the space.
Key Players in the Venture Debt ecosystem
Bootstrap Europe – Flexible growth debt for tech businesses.
Kreos Capital - Flexible venture debt for growth-stage European startups.
Capchase – Revenue-based financing tailored for SaaS startups.
Flow Capital – Early and growth-stage venture debt.
Claret Capital Partners – Growth debt solutions for European scale-ups.
Columbia Lake Partners - Growth loans to European technology companies.
And more: Orbit Capital, IPF Partners, Flashpoint VC, Inveready
For investors, venture debt isn’t just a financing tool—it’s an attractive investment asset.
Benefits of Investing in Venture Debt
Lower Portfolio Risk – Venture debt offers downside protection without compromising returns.
Non-Correlated Returns – Returns from venture debt aren’t directly tied to public market fluctuations.
Short-Term Liquidity – Most loans have relatively short terms, improving flexibility.
Strategic Partnerships – Venture debt lenders often co-invest alongside VCs, bringing industry expertise.
👉 Further insights: The case for investing in venture debt.
📊 Venture debt in numbers: The global venture debt market is projected to reach $48.92 billion by the end of 2025, indicating its growing significance in startup financing.
When does venture debt make sense—and when should founders avoid it?
When to use (or avoid) Venture Debt
When to consider:
✔ Bridge financing for exit. ✔ Extending runway between equity rounds. ✔ Enhancing Capital Efficiency. ✔ Need for non-dilutive capital alongside equity. ✔ Meeting working capital need.
(More: Startup Reporter)
When to avoid:
❌ Unproven revenue streams. ❌ High burn rate. ❌ Unclear growth strategy. ❌ Unsuitable loan terms. ❌ Equity investment as a better option. ❌ Risk of over-leveraging.
(More: EU Startups)
The Future of Venture Debt
Venture debt continues to evolve as a critical funding tool for startups and an attractive asset class for investors. The shift toward larger deals, combined with the emergence of new players filling the funding gap, presents opportunities and challenges alike.
In order for venture debt to be as effective as possible, it should not be viewed as a back-up when equity capital is unavailable, but rather as a complementary fundraising strategy.
For founders, understanding the nuances of venture debt is key to leveraging it effectively. For investors, its risk-adjusted returns and non-correlated nature make it a compelling addition to a diversified portfolio.
👉 Further insights:
Venture Debt case studies: Habito, Mina Therapeutics
🙌🏼 People who inspired us lately
Safra Catz
Safra Catz, CEO of Oracle.
Safra made history by announcing a record-breaking $500 billion dollar federal AI project to create 100,000 jobs in the US. Born in 🇮🇱 Israel, she joined Oracle in 1999 and became CEO in 2019. She led Oracle’s $10.3B acquisition of PeopleSoft and co-led a $500B AI initiative with SoftBank and OpenAI.
👉 Read more here.
Nell Dally
GP at Revenge Capital, Venture Capitalist, Ex-Social Worker
Nell Daly, is the sole General Partner of Revenge Capital. She used to be a single mother with three children and no money; a social worker helping victims of domestic abuse and rape; and a Fox News commentator, sleepless at the threats of sexual violence filling her Twitter feed and voicemail. Now she’s launching an investment fund to back female entrepreneurs in the 🇬🇧 UK, keen to make things right.
👉 Read more here: The Times
Bonnie Y Chan
CEO at Hong Kong Exchanges and Clearing Limited, Lawyer
A 🇭🇰 Hong Kong-born lawyer, Bonnie takes the reins as the first woman and first internal candidate to serve as CEO at HKECL. She is a seasoned capital markets expert with more than 30 years of experience in legal and financial services with Asia Pacific.
👉 Read more here: SCMP Business
🤑 Latest Fund News
Borski Fund has reached final close of €50M
With commitments of more than €9m from M&G Investments, Borski Fund has reached final close of €50M. The fund is managed by a predominantly female fund management team investing into female-led tech start-ups or into companies offering products and services for women.
Senovo Announces First Closing of Fund IV at €80M
With driving increased demand for Al-enabled software solutions, particularly among mid-market and enterprise companies - Senovo Fund IV comes at a pivotal moment, uniquely positioned to capitalize on these trends by backing the leading European SaaS startups.
A new Article 8 Fund by Voima Ventures!
Voima Ventures has closed its €100m+ Article 8 fund, targeting early-stage deep-tech startups across the Nordic and Baltic regions. The fund will invest €200k-€3m tickets in 25-30 companies, focusing on science-based innovations in life sciences, energy, food, quantum, and advanced AI.
Sustainability and impact investing by Pymwymic
Pymwymic has closed its second fund at €71.5m, targeting early-stage food system companies across sustainable farming, food waste reduction, and soil health. The fund plans to invest €500k-€5m tickets in 15-20 companies.
Funding news⚡
Hycamite raises €44M Series A
Industry: ClimateTech | Location: 🇫🇮 Finland | Funding: €44M Series AHycamite, a Finnish low-carbon hydrogen producer, raised €44M in a two-step Series A round to launch its industrial-scale demonstration unit. Led by Sojitz Group, the round saw participation from existing investors Holdix Oy, Turret Oy, and Stephen Industries Oy, with new investments from OMV Petrom (OMV Group) and MOL PLUS (Mitsui O.S.K. Lines).
👉 Read more here.
€42M Series C Round for Nuritas Biotech
Industry: BioTech | Location: 🇮🇪 Ireland | Funding: €42M Series CIrish biotech firm Nuritas raised €42M in a Series C round led by M&G Investments. McWin Capital Partners joined as a key investor, alongside existing backers Grosvenor and ECBF, to support Nuritas’ groundbreaking peptide discovery platform.
👉 Read more here.
$10M Series A for french Pathway
Industry: AI | Location: 🇫🇷 France | Funding: $10M Series AFrench AI company Pathway, co-founded by Zuzanna Stamirowska and Claire Nouet, raised $10M in a Series A round led by TQ Ventures. The platform uses real-time AI systems to deliver transformative insights, setting new standards in advanced AI solutions.
👉 Read more here.
MedTech Robeauté closes €28M Seed Round
Industry: MedTech | Location: 🇫🇷 France | Funding: €28M SeedFrench MedTech startup Robeauté raised €28M in a Seed round led by Plural, Cherry Ventures, and Kindred Ventures, alongside LocalGlobe, Think.Health, and APEX Ventures. Brainlab also contributed strategic investment to advance medical innovation.
👉 Read more here.
All these are female-led - Huge achievements!!
However, there’s still a long way to equality. Female founders raise only 2% of VC money in Europe.
🎧📚 What are we reading and listening to?
14 powerful trailblazing women you should follow
Kate Ryder - founder of Maven Clinic• Building the world's largest virtual clinic for women and families.• Closed a $125 million funding round at a $1.7 billion valuation.Shai Eisenman - founder of Bubble• Sharing BTS of building an incredible skincare brand.• Crossed the nine-figure revenue milestone in 2024.Rachel Delacour - founder of SWEEP• Sharing updates about her leading sustainability data management platform.• Raised $22 million in Series A and $73 million in Series B funding.Julia Hartz - co-founder of Eventbrite• Posting about her entrepreneurial journey, while growing a global self-service ticketing platform.👉 And 10 more amazingly inspiring women, check them out here!
What is the real cost of running a VC firm?
We read Carmen Alfonso Rico’s take (Founder of Cocoa 🍫) about the real cost of running a VC firm. Food for thought and great advice for others following in her footsteps!
👉 Find out more here.
🎙️ New podcast alert: Grit and Grace!
Started off episode 1 with menopause expert Dr. Shahzadi Harper is live now! 🎧
More good reads here:
EU regulations that might affect your startup in 2025.
For European female founders the time has finally come
Companies outperform with more women on boards.
Europe’s 2024 Unicorns. We can’t wait to see you on the list!
$32 trillion reason to bet big on women in 2025
What we have been up to? 🎉
Secondary Markets Ask Me Anything Session
Exclusive AMA session for EWVC members: Managing fund liquidity in a low-exit environment, featuring Kristaps Ronis from lon Pacific.
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0100 Emerging Europe, May 14-16th, 🇭🇺 Budapest.
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0100 Mediterranean, 🇮🇹 Milan.
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Happy New Year, we hope January started off great for you! We are excited to reconnect, as always, thank you for your support.
We come back fully recharged for the year ahead, let’s make it count! 🎉
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Join us in shaking up the VC world! 🚀
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