Debt Market Update – Q3 2025

As we review Q3 2025 the venture debt market continues to show positive momentum, with both the technology and healthcare sectors showing meaningful signs of growth. While each sector exhibited distinct patterns, both recorded increases in deal count and volume, supported by larger transaction sizes and deepening deal pipelines as the year draws to a close.

In the technology sector, momentum accelerated notably. Deal count rose 25% from the prior quarter and 3% year-over-year, reflecting continued demand for venture debt as a flexible financing tool amid a still-volatile equity environment. Completed deal value totaled approximately $16 billion—the third-highest quarterly total over the past five years. Although this marked a 13% decline from the record-setting second quarter, it reflected a dramatic 236% increase from the same period last year.

The healthcare sector followed a similar upward trajectory, continuing a positive trend in both deal value and transaction count. Venture lending volume rose to $2.3 billion in Q3, up from $2.0 billion in the prior quarter, while the number of transactions increased 16% to 55. The data highlights a continuing pattern of fewer but larger financings—a theme that has characterized healthcare lending throughout 2025. Compared to Q3 2024, total deal volume was up 26%, while the transaction count declined nearly 50%, suggesting that lenders and borrowers are increasingly targeting scaled opportunities with more mature companies or later-stage financing needs.

Taken together, these trends indicate that venture debt may be begun re-establishing itself as a core component of growth-stage capital structures. As the year concludes, the combination of strong deal pipelines, healthy balance sheets, and investor appetite helps to position the venture debt market for continued expansion into 2026  — with expectations of stable to rising volume across both sectors, despite a moderating macroeconomic backdrop.

To gain more insights into the venture debt market in Q3 2025, download the full report and read Capital Advisors Group’s Quarterly Debt Market Update.