Around one in five venture debt deals are financed by banks, who have completed 1,269 deals since 2018

  • HSBC Asset Management (HSBC AM) has appointed Silicon Valley Bank’s (SVB) former Chief Credit Officer Pete Scott as Head of Innovation Credit, based in San Francisco.

  • Scott will lead HSBC AM’s venture debt strategy, providing senior secured loans to growth and late-stage VC-backed tech and life sciences companies across UK, US, and European markets.

  • HSBC said the strategy will aim to raise at least $500mn, targeting annual returns of 15–18%.

  • HSBC AM acquired SVB’s UK arm in 2023 for £1 ($1.25), while the troubled bank’s main US business was bought by First Citizens BancShares.

November 26, 2024 (Preqin News) – Venture debt remains a niche category within private markets but can be an attractive proposition for founders who want growth capital, but do not want to further dilute ownership.

However, venture debt deal volume has fallen over the past three years from a record 1,303 deals to 209 so far this year, according to Preqin data. Banks have made up 20.1% of deal volume on average, second only to venture capital and private equity firms (31.5%).

Banking on profit?

Venture debt deals, 2018–2024 YTD

Banking on profit?

Source: Preqin Pro. Data as of November 2024

Financial and insurance start-ups (61), information technology (56), and healthcare (27) are the leading target sectors for venture debt deals so far this year, according to Preqin data.

‘Establishing this venture debt capability with HSBC Asset Management expands the breadth of flexible solutions we now have to meet the financing needs of the innovation ecosystem, positioning HSBC as a long-term partner for innovation clients globally,’ Simon Bumfrey, CEO of HSBC Innovation Banking UK said in a statement.

The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.