Market Insights Financial Capital Raising Traditional Capital Raising

Venture Debt - United Arab Emirates

United Arab Emirates

The United Arab Emirates is expected to see the Total Capital Raised in the Venture Debt market market reach €22.24m in 2024.
Traditional Venture Debt is the dominant player in the market, with a projected market volume of €21.63m in 2024.
When compared globally, the United States is set to generate the most Capital Raised, reaching €20,780.0m in 2024.
In the United Arab Emirates, Venture Debt is gaining traction as a strategic capital-raising option for tech startups in a growing entrepreneurial ecosystem.

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

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Analyst Opinion

The Venture Debt market in United Arab Emirates has been experiencing significant development in recent years.

Customer preferences: In the United Arab Emirates, there is a growing preference among entrepreneurs and startups for alternative financing options such as venture debt. This is primarily driven by the desire to retain ownership and control of their businesses, as well as the need for flexible and non-dilutive capital. Startups in the country are increasingly looking for ways to fund their growth without giving up equity, and venture debt provides an attractive solution.

Trends in the market: One of the key trends in the Venture Debt market in United Arab Emirates is the increasing number of venture debt providers entering the market. This is a result of the growing demand for alternative financing options and the recognition of the potential for high returns in the startup ecosystem. These providers offer customized debt solutions tailored to the specific needs of startups, including flexible repayment terms and lower interest rates compared to traditional bank loans. Another trend in the market is the focus on technology-driven startups. The United Arab Emirates has been actively promoting itself as a hub for innovation and technology, and this has attracted a significant number of startups in the sector. Venture debt providers have recognized the potential in this market and are increasingly targeting technology-driven startups with specialized financing solutions.

Local special circumstances: The United Arab Emirates has a favorable business environment that supports the growth of startups. The government has implemented various initiatives to promote entrepreneurship and innovation, including the establishment of free zones and the introduction of favorable regulations for startups. These factors have created a conducive environment for venture debt providers to operate and for startups to access alternative financing options.

Underlying macroeconomic factors: The United Arab Emirates has a strong and stable economy, driven by sectors such as oil and gas, tourism, and finance. This provides a solid foundation for the growth of startups and the venture debt market. Additionally, the country has a high concentration of high-net-worth individuals and institutional investors who are willing to invest in startups and provide the necessary capital for venture debt providers. In conclusion, the Venture Debt market in United Arab Emirates is developing due to the increasing customer preference for alternative financing options, the entry of new venture debt providers, the focus on technology-driven startups, the favorable business environment, and the underlying macroeconomic factors. This trend is expected to continue as more startups seek flexible and non-dilutive capital to fund their growth.

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.