Venture debt is essentially a high-interest loan advanced to early stage companies that want to raise capital without diluting equity, or one that they turn to when venture capital becomes scarce. To be sure, although venture debt has gained significant ground, venture capital remains the main source of finance for startups.
This year, fintech has emerged as the top sector for venture debt, with companies securing $671.1 million across 49 fundraising rounds, up from the $307.2 million they raised across 25 rounds in 2023, according to data from analytics firm Tracxn.
Regulatory sanctions and uncertainty in the fintech landscape have kept venture capital funds at bay, reducing equity funding to Indian…