Venture debt firms favor mature private companies over startups.

Venture debt firms are shifting their focus to mature private companies as more startups stay private for longer. Venture debt value hit a record $53 billion in 2024, up from $27 billion the prior year and surpassing a previous high of $42 billion in 2021. This shift is driven by the growing number of startups staying private for longer, leading to larger deals with mature companies.

Venture debt firms are increasingly shifting their focus to larger deals with mature private companies, a trend driven by the growing number of startups remaining private for extended periods. According to a report by Runway Growth Capital in partnership with PitchBook Data, venture debt value hit a record $53 billion in 2024, up from $27 billion the prior year and surpassing a previous high of $42 billion in 2021 [1].

This shift is notable as it reflects a broader trend in the startup ecosystem. More companies are choosing to stay private longer, often to avoid the scrutiny and regulatory pressures associated with public markets. This strategy allows these companies to maintain flexibility and control over their growth and decision-making processes. As a result, venture debt firms are finding opportunities in these mature private companies, which often have established business models and are seeking funding to scale or expand their operations.

Anchorage Digital, a prominent player in the cryptocurrency space, has launched a venture arm to back early onchain protocols. This venture arm, Anchorage Digital Ventures, provides comprehensive support that extends beyond financing, including product development and access to institutional customers. The company, valued at $3 billion as of December 2021, has raised $487 million through multiple financing rounds [2].

The launch of Anchorage Digital Ventures highlights the evolving landscape of venture debt and the growing importance of strategic partnerships. By offering more than just financial support, these ventures can help protocol teams navigate the complexities of market entry and institutional adoption. This approach not only aligns with the company's strategic goals but also positions it as a key player in the burgeoning onchain protocol market.

As venture debt firms continue to focus on mature private companies, it is essential for investors and financial professionals to stay informed about these trends. Understanding the dynamics of the startup ecosystem and the evolving role of venture debt can provide valuable insights into potential investment opportunities and strategic partnerships.

References:
[1] https://www.wsj.com/articles/venture-debt-firms-tilt-toward-mature-companies-98cd30dc
[2] https://investorempires.com/3-billion-anchorage-digital-launches-venture-arm-to-back-early-onchain-protocols/