Debt Market Update – Q1 2025

As we review the overall numbers for Q1 ’25, we see a tale of two markets – technology and healthcare. Tech market deal value of $11.5 billion remains very healthy relative to historical quarterly value numbers.

Healthcare, on the other hand, hit a new quarterly low in deal value of just $400 million. Notably, despite these mixed deal value numbers, both sectors experienced somewhat shocking historic lows when it came to total deal count. At 122 deals, the tech sector deal count came in at less than half of the previous lowest quarterly deal count recorded in the past five years. Healthcare fared even worse recording just 33 deals, a drop of 61% from the prior low quarterly deal count recorded back in 2023.

We generally attribute these trends to a continuation of lenders moving toward larger, later-stage growth investments. These deals tend to be much larger skewing average deal size higher. So, while the tech sector enjoyed a strong quarter in deal value, growth-stage-focused lending accounted for 83% of all completed deals in Q1, according to Pitchbook.

Historically, early-stage and later-stage VC backed companies commanded the lion’s share of venture lending, but that trend began to shift toward growth companies in 2020 and has accelerated dramatically into this year.

To gain more insights into the venture debt market in Q1 2025, download the full report and read Capital Advisors Group’s Quarterly Debt Market Update.