Debt Market Update – Q4 2025

As we review Q4 2025, the venture debt market found its footing after a strong mid-year surge. Activity cooled across both technology and healthcare, but the broader 2025 story remained intact: disciplined capital deployment, fewer transactions, and a continued shift toward larger, later-stage financings.

In the technology sector, activity cooled as the year closed. Deal value fell to approximately $9.7 billion, down 39% from Q3 and 46% year-over-year, reflecting a pullback from exceptionally strong mid-year levels. Transaction count declined to 234 deals, an 8% drop from Q3 and 23% lower year-over-year, signaling a more selective lending environment. Despite this slowdown, technology venture debt volumes for 2025 finished 11% higher than 2024.

Healthcare followed a similar cooling pattern in Q4, but with a notably different dynamic. Venture debt volume reached approximately $2.0 billion, down 13% from Q3, while deal count declined to 40 transactions. Despite fewer deals, healthcare volume was more than 120% higher year-over-year, despite a 56% drop in deal count. This divergence reflects a defining trend of 2025: capital flowing into fewer, larger financings for more mature companies with clearer paths to scale and profitability. For the full year, healthcare venture debt volumes were 45% higher than 2024.

Overall, Q4 results point to a market moving from acceleration to stabilization. While year-end seasonality and macro uncertainty weighed on quarterly activity, the underlying foundation remains strong, supported by healthy balance sheets, disciplined underwriting, and a steady demand for venture debt. 

Across all sectors, total venture debt volume in 2025 rose 2% over 2024, making it the strongest year to date. As 2026 begins, venture debt appears well positioned to remain a core component of growth-stage capital structures across technology and healthcare, even within a more measured economic backdrop.

To gain more insights into the venture debt market in Q4 2025, download the full report and read Capital Advisors Group’s Quarterly Debt Market Update.