European Venture Debt Market Update June 2026 (Houlihan Lokey)

Summary

• In 2025 European venture debt deal count declined to 656 transactions and total deal value fell by c. 30.7% to €20.1 billion.p.3
• Sizeable transactions included United Petfood Producers (€1.4 billion, Belgium), Flix (€1.1 billion, Germany) and FINN (€1.0 billion, Germany).p.3
• The United Kingdom led in both transaction volume and deployed capital (41% and 34% of total, respectively).p.4
• IT firms were the dominant sector in deal volume (37%), while financial services had the largest average ticket size (c. €80 million per deal).p.4
• Venture debt represented c. 29% of total European venture capital deal value, down from the 2024 peak of c. 47%.p.5
• Venture growth now accounts for 28% of deals and, combined with later-stage VC, 55% of total deals in 2023–2025.p.6

Key insights

1. Total deal value remained above historical pre-2021 levels despite the decline.p.3
2. Average deal sizes varied by sector: financial services c. €80 million, energy c. €54 million and business products and services c. €41 million.p.4
3. Venture debt is expected to remain relatively resilient in 2026 but constrained within a cautious funding backdrop.p.5
4. The market is expected to sustain its flight to quality, with capital concentrated in larger, later-stage companies.p.6
5. Nscale's €1,206 million deal, with lenders including ABN AMRO, DNB, Nordea Bank and SEB, was among the largest selected transactions.p.7
6. United Petfood Producers raised €1,425 million, backed by BNP, ING, J.P. Morgan and Rabobank.p.7