Who is Who? European Tech lenders

Brief description of the main Venture Tech lenders in Europe: Banks, Funds, Alternatives, and other Institutional lenders.

Author: Lucas de la Vega for Medium.

European Venture Tech lending landscape is shaped by a wide range of players with different roles. Funds have been moving towards the banking territory increasing size and achieving competitive prices to Tech BlueChip lending while on the other hand, Banks have been willing to surf the Tech hype through a different number of initiatives.

Venture Tech Lenders trying to find their way
Venture Tech Lenders trying to find their way

In addition to this complex status-quo, Alternative lenders are offering structured finance to Tech SMEs and a whole new range of FinTech companies are successfully financing Tech businesses filling the gap historically unattended by banks or funds.

Despite this potpourri, Tech lending in Europe still remains at low levels. European Venture debt remains limited compared to the US where this asset class thrives and is present in c.20% of all VC transactions -vs. 5% in Europe- according to SVB. This is possibly due to the lack of maturity of the Venture Capital landscape in Europe and low competition compared to the US. Governments and other State-owned Institutions in Europe are doing a great job providing liquidity to Tech companies at an SME level and as a consequence the niche of Venture debt lenders is narrowing.

I have tried to put down a list of the most relevant Venture Tech lenders divided into four different categories: (i) Banks, (ii) Funds, (iii) Alternative lenders and (iv) Institutional -Government or State-Owned lenders-.

Tech lenders divided by category
Tech lenders divided by category

Within the wide ocean of Venture Tech lenders presented above I have tried to summarize the key aspects of each category based on timings, amount, cos of capital, and risk profile. Please remind that this is a bird’s eye view of the sector and each player may have its own characteristics.

Scorecard based on: Execution Speed (Slow to Quick), Amount, Cost of Capital and Risk Appetite
Scorecard based on: Execution Speed (Slow to Quick), Amount, Cost of Capital and Risk Appetite

1. Banks

Owned by their shareholders with a rather long-term view, their will is to onboard a future successful corporate client. Banking sector is spread asymmetrically along Europe with highly banked countries such as UK, Spain and Italy and other more conservative such as Germany, Benelux, or Ireland.

Banks could be too slow for some quick-win strategies
Banks could be too slow for some quick-win strategies

Banks may be typically slower on their procedures, but they are also cheaper (interest rate and equity-kicker) as they fund through their own balance sheet. They normally try to engage ancillary business as a part of the proposal (Credit Cards, FX, Deposits) which could possibly increase total pricing of a transaction.

They could move from the very early stage of financing to more mature business depending on the size of the funds committed to this kind of financing.

Banks are particularly attached to a geography and they are not very stretchy as their mandate is generally related to a certain location.

Banks are generally less dilutive than Venture debt, but they are often more risk averse than funds (given capital requirements)and may be not be suitable for asset-light and other non-breakeven oriented business models. Within the bank categories there are two differentiated players:

1. 1. Traditional Banks

The top-tier banks who have a specific team to complete this kind of operations. This divisions are generally hard to find as they are often placed among different business units depending on the Bank structure. They are generally not actively marketing their investments which represents a side-business of other division within the bank, (generally Asset Management or SME Lending).

Some expamples present in Europe are: Goldman Sachs Growth (UK); Barclays Venture debt (UK), Santander Smart (SP), BNP Paribas (FR) or Soc.Gen (FR)among others.

1.2. Niche players

These generally represent the local champions of the category given their ability to perform in a timely manner at a restricted price. These banks generally have a very specific approach to Tech companies and have developed an important expertise on the segment.

Some of the most relevant players in Europe are: Sillicon Valley Bank (UK), Shawbrook (UK), Handlesbank (GER) or Sabadell (SP).

2. Funds

With a similar structure to Venture Capital funds they have an LP base who seek the return of their investment in a limited time of period. They are more flexible and have an increased risk appetite compared to banks and their operations are generally driven by profitability.

Quick tailor-made proposal may be expensive
Quick tailor-made proposal may be expensive

Venture debt funds have developed strong relationships with Venture Capital funds and although they could eventually perform Sponsorless transactions most of their deal flow come from Venture Capital funds who benefit from the positive leverage effect of debt.

Funds are able to address tailored proposals to companies in a short period of time given their light structure, small teams, and lean investment process. Depending on the fund size, they might be able to commit very relevant amounts.

2.1. Cross-Border Funds

Given the increase of the European ecosystem and the increased number of important companies we have seen some iconic US names such as WTI or Triplepoint entering into certain number of European transactions (i.e. Infarm). However, this is only the tip of the iceberg as these funds entry level ticket is on the upper range of the local Venture debt funds.

At this stage, SaaS and Deep tech businesses have proven an important resiliency as an asset class and you might eventually see many of the non-Tech management firms such as TPGTemasek closing structured deals (i.e. Spotify) with very substantial amounts of money.

2.2. European Venture Debt Funds

Venture debt funds do not target Seed companies and start operations were there is a demonstrated product-market fit driving revenue to the company, mainly from Series A onwards. However, many local players have been able to attend this low-end segment by setting collateral structures.

There is a wide range of Venture debt providers in Europe, most of them represented by young management firm which are currently at their second or third fund. The exception to the rule is the category killer Kreos Capital.

Find below a list with the most relevant Venture debt funds in Europe:

Facts and figures above shall be used as a proxy, most Venture debt Terms and Conditions are very flexible
Facts and figures above shall be used as a proxy, most Venture debt Terms and Conditions are very flexible

The exponential increase of Venture Capital funds in Europe has driven the increase in size of the top-three Venture debt players (KreosCLP and Harbert have +€100m funds) which has left some space to mid-sized players such as Inveready and some other first-time funds like FlashPoint or Orbit Capital.

Besides, there are some other relevant players focused in one specific area of expertise such as IPF (Health Tech) or Global Growth Capital (GFC debt arm) with an important focus on FinTech and PropTech.

3. Alternative Lenders

The black box of lending, as a Venture debt provider I often come across different names that could replace banks or funds in the Balance Sheet. They do have a very different nature but as a simplistic approach they could be divided into two separate categories: SME Structured Finance specialists and Pure Tech lending firms.

Alternative lenders finding their way
Alternative lenders finding their way

3.1. SMEs Structured Finance

Latest health crisis has proven the counter cyclical nature of Tech investments and their remarkable ability to grow. This resilience has caught the eye of an important number of funds historically dedicated to Structured Finance, Mezzanine and other sort of Hybrid instruments.

All of these have seen a potential mismatch of risk return profile and are active looking after Venture lending deals.With an important concentration in the UK: Boost&Co (UK), Fuse3 (UK), Finstock Capital (UK)or BGF (UK) are examples of funds dedicated to SME lending which often show up in Tech lending deals.

3.2. Pure-Tech Players

FinTech has no mercy with old-fashioned ways of banking and several new models have arisen thanks to disruptive technologies.

New models based on P2P Finance (October, UK) and Crowdlending initiatives. As well as Revenue Based Finance with some interesting companies such as Round2, AUS or Uplift1, GER.

In addition to some SaaS/MRR lines initiatives as (Uncapped, POL), (Pulse, UK) or (Outfund, UK) have poped up in the balance sheet of Tech companies enhancing short-term liquidity and reducing the banking gap.

The number of Pure-tech players has notably increased in the past years trying to engage clients sooner and to develop more powerful credit-scoring tools through technology.

Although this kind of financing is still not relevant in Europe the tide rising for traditional players who will soon be facing fierce competition from this alternative sources of financing.

4. Institutional and other sized players

The European Union has consistently helped its SMEs through a number of initiaves (such as the Junker plan) and will continue doing so in the future. Venture lending strategy is operated mainly through EIB and EIF as well as at a regional level.

4.1. European Investment Bank (EIB) and Fund (EIF)

EIB and EIF are the greatest European lenders
EIB and EIF are the greatest European lenders

Size matters and governments are very aware of this fact. The EIB represents the biggest source of Venture Debt in Europe with over €2bn committed so far to this kind of finance, and lending some €600m every year. EIB offers the longest maturities and grace periods from all the Venture lending spectrum at an attractive pricing.

“On top of the above mentioned, the EIB represents a very positive signaling for other potential investors.”

EIB is focused on a wide range of sectors such as: Software (SaaS), Life Sciences, Clean Tech and Renewables among many others. Against other typical lenders, the EIB use of proceeds should be preferable addressed to Research & Innovation.

The EIF is a specialist provider of risk finance to benefit SMEs across Europe. Within this aim it offers a great number of targeted financial products to intermediaries (i.e. Banks, Funds, Guarantee and Leasing companies, Micro-credit providers) which are very often found in the balance sheet of Tech companies and that may represent the cheapest source of liquidity.

4.2. National Government Entities

Besides the critical role of the EIB ad EIF, there are several initiatives undertaken by national entities which help Venture backed companies through different facilities such as Equity-matching initiatives, Guarantee lines and/or Direct loans. Find here below a shortlist of the most relevant local entities:

  • BBB (UK) dedicated to making finance markets work better for smaller businesses it has recently launched Future Fund initiative to help growing companies
  • KWF (GER) powerful public entities specialized in FoF that has recently launched the Corona Matching initiative alongside with the EIF.
  • BPI (FR) has probably the largest and deepest public financing offering in Europe, leaving little space for private players.
  • ICO (SP), a very large offering of lending facilities to help SMEs, ICO has recently launched a matching facility through CDTI for accredited Venture Capital investors
  • PME Investimentos (PT) has a very strong impact in the powerful SME and the blooming Tech landscape in Portugal they recently launched a matching programe called 200M.
  • The MCC (ITA) who is committed to SME lending with an special focus on the Southern regions of Italy and the FII (ITA) with an important focus on Innovation and Technology.

Almost all European countries have their own public entity devoted to enhance the SME Tech lending (i.e. AWS in Austria) and supporting public-private initiatives.


European Venture Tech lending landscape has grown consistently in the past years and is expected to continue with this trend in the future given the increased maturity of the Venture Capital ecosystem, the rough competition between funds and the critical liquidity gap generated by an uncertain macro-environment.

Against the US, European Venture lending landscape is shaped by the important influence of government-backed lenders and the more conservative approach of funds who do not percieve leverage as a core instrument for growth.

HoweverTech funds have already started to feel the pinch and are shifting onto more capital efficient business models where debt and other non-dilutive instruments should squire growth beside limited capital contributions from funds. This strategy should avoid unnecessary dilution while maximizing returns for all the stakeholders.


Please be aware that there is an unlimited number of lenders and each company has its own funding story. Do not hesitate to share yours so I can keep this evergreen post as updated as possible.

* Venture Tech Lenders correspond to lenders providing substantial amounts of money with an increased risk appetite to fast-growing Tech companies. Lenders repayment relies solely in the ability of the lenders to outperform the market with superior returns. As a rule of thumb Venture Tech lenders search for Negative Cash Flow generating companies with a Technological advantage.

** Note that all the Convertible Bonds and other Quasi-equity private initiatives have been excluded from the Venture Tech lending spectrum as they benefit from the full Equity-upside and are therefore highly dilutive. We have presented some Equity-matching initiatives as they represent direct competition to Venture debt lenders

*** Scorecard above is based on a qualitative analysis based on +50 interviews with Venture Capital and Venture debt funds, Founders, CFOs and other Public sources of information, it is meant to represent dynamic framework were inconsistencies may appear given the different strategies performed by each player/category

**** If you’re missing a name on the Venture debt funds please remind that Venture debt remains a non-mature category were some players still benefit from the lack of transparency and market-standards. Some important funds refused to appear on the list


Zubi Capital Asset Management lanza el primer fondo de venture capital de impacto en diversidad e inclusión en España

Zubi Capital Asset Management launches the first diversity and inclusion impact venture capital fund in Spain