As traditional venture capital funding becomes increasingly selective in today’s unpredictable economic climate, more startups are turning to alternative options to fuel their growth.
One of the most prominent paths gaining traction? Venture debt.
And to better understand this shift, Stride Ventures, a New Delhi-based growth credit firm, has teamed up with global consultancy Kearney to launch the Global Venture Debt Report 2025.
This newly released report offers a deep dive into the state of venture debt (VD) and growth lending (GL) across several global markets—including India, Southeast Asia, the GCC, and Europe.
Packed with real data and fresh insights, it sheds light on how this evolving form of financing is taking hold, particularly in regions where traditional capital is slowing.
Europe Leads the Pack in Growth Lending Trends
Europe is showing strong momentum in the venture debt space, with the market touching $19.78 billion in 2024, growing steadily at a 21% compound annual growth rate since 2018.
While the total number of deals has dipped due to economic pressures, the appetite for structured debt is only getting stronger across the continent.
The UK has emerged as the frontrunner, responsible for around 18% of all VD and GL deals last year.
Interestingly, most of this funding went to late-stage startups, which accounted for a whopping 82% of the total deal value.
In a survey of over 200 founders, venture capitalists, and institutional investors, nearly everyone agreed on one thing—venture debt is primarily being used to fuel company growth.
That makes sense, considering how tight equity funding has become.
Fintech, Healthtech, and Cleantech Are the Big Winners
When it comes to which sectors are reaping the benefits, fintech leads the way, projected to capture 47% of all VD in FY26.
Close behind are healthtech at 28% and cleantech at 25%, showing a clear pivot toward industries that are resilient to regulation and have a broader social mission.
Even with deal volume in Europe dropping from 967 in 2023 to 589 in 2024, the amount of venture debt compared to venture capital has increased—from 16% in 2018 to 30% in 2024.
That says a lot about where the market is headed.
Regulatory Gaps Still Holding Europe Back
Despite its rapid growth, Europe’s venture debt ecosystem isn’t without its challenges.
One of the main issues? Lack of regulatory harmony.
There’s still no unified definition of what qualifies as “venture debt” across countries.
This makes it harder for cross-border investments and stifles innovation.
What’s more, the term “growth lending” has become a broader label that often includes different types of debt tools—everything from term loans to warehouse financing. It’s mostly used for late-stage, high-growth companies looking for non-dilutive capital.
GCC and India Markets Show Rapid Momentum
Outside of Europe, other regions are also stepping up.
The Gulf Cooperation Council (GCC) region, for example, has seen venture debt grow at a staggering 54% CAGR since 2018.
India, while still in earlier stages of adoption, reached $1.23 billion in venture debt value in 2024.
But that only makes up 10% of the country’s total venture capital flow, suggesting huge potential for expansion as the financing ecosystem matures.
What Europe Needs to Do Next
Europe might have the lead in total deal value and institutional interest, but it still trails when it comes to scale and lender diversity.
Right now, there are only about 30 active VD players in Europe, compared to 250+ in the United States.
To really unlock its potential, Europe must look beyond traditional strongholds like the UK, Germany, France, and the Netherlands, and work on creating a more unified framework.
Doing so would make it easier to scale across borders and attract more players to the space.