Olya Klueppel, Partner and Head of Credit at GP Bullhound, comments: “European technology companies finally have greater access to debt financing in a variety of structures and from a range of providers. Founders recognise the advantages of debt, including flexibility, speed and lower cost of capital. We believe European tech lending is at an inflection point: all the ingredients for success are there and we anticipate increased opportunities for founders and investors.”
European credit market maturing – sustained growth in lending
As the region’s startup ecosystem has matured, European founders are raising capital in more diverse ways, with debt increasingly used to finance growth initiatives and acquisitions. 2021 was a breakout year, in which the debt market more than doubled year-on-year and grew impressively, just shy of 4.0x since 2016.
New approach needed – data driven decisions
With 50% of European debt funding rounds involving late-stage businesses, Europe’s mid-market tech companies remain underserved. The availability of debt financing and credit instruments has clearly lagged behind the US. However, this is changing, with the entry of US players and European debt investors raising large funds.
Looking to the future
With rising inflation rates, geopolitical volatility and the end of low-interest-rate policies, there will be a greater need for alternative financing sources. For tech companies being built in Europe, debt will become an increasingly attractive option, and we expect the market to grow and mature.
Why opt for debt financing? Can debt and equity financing go hand in hand? What’s missing in the debt market today? This report features leading analysis and data compiled by GP Bullhound’s Insights team, as well as key expert views shared by founders and investors from companies such as Lendis, Sumup, Stratio, Verdane, Adara Ventures, HV Capital, One Peak Partners, CapChase and Amentum Partners.
We thank Dealroom.com for their support in collecting investment data, and our interviewees for their time, data and insights.
For enquiries, please contact:
Olya Klueppel, Partner, at [email protected]
About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 12 offices spanning Europe, the US and Asia. For more information, please visit www.gpbullhound.com.