The Drawdown

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The venture debt market has spent the better part of a decade underwriting against SaaS ARR as the primary indicator of creditworthiness. The logic was defensible: recurring revenue from diversified enterprise customers was sticky, predictable, and relatively insulated from macro shocks. That logic is now being tested in a way it hasn't been before.

AI agents are not a future risk. They are actively eliminating the human seat licenses that SaaS ARR is built on. A company that counts 10,000 per-seat licenses as its revenue base is already having conversations with its largest customers about renegotiating structure. The outcome — whether repricing, rebundling around outcomes, or contract renegotiation — compresses ARR in the near term even for businesses with strong underlying utility.

For venture lenders, the underwriting question has shifted. Historical ARR growth as a proxy for business quality is insufficient. What matters now is how defensible the revenue is against AI-driven seat reduction, and whether the borrower has a credible path to a new pricing model that maintains or improves their revenue capture.

The opportunity sits on the other side of that risk. Companies that are genuinely AI-native — building their own AI leverage into cost structure and product development — are reaching milestones at a fraction of the burn that the prior generation required. The venture debt structures that work for those businesses are different: smaller checks, faster paths to profitability milestones, and potentially shorter duration. Lenders willing to adapt their credit box to the new operating economics of AI-native businesses will find a less competitive market with borrowers who are structurally more capital-efficient.

The macro signal worth tracking: Oaktree's $2.4B first close on a Special Situations fund is not noise. Institutional allocators of that caliber do not raise at that scale without conviction that credit stress is coming. Blue Owl's $1.4B secondary sale at 99.7% of par tells a different story — that existing positions remain high-quality, but that redemption pressure from LPs is creating forced liquidity events. Both data points can be simultaneously true, and both are relevant to how lenders think about the next 18 months.

Recent Debt Financings

• AlayaCare — $50M from CIBC Innovation Banking

  Montreal-based home care software platform. Financing supports continued M&A activity across the US and Canada.

• OSSIO — $50M from Horizon Technology Finance & Monroe Capital

  $40M funded at close with $10M in additional availability. Orthopedic implant technology company.

• Maze Therapeutics — $200M from Hercules Capital

  $40M funded at close, 5-year loan with up to 48–60 months interest-only. Precision medicine platform targeting genetically defined patient populations.

• Phoenix Tailings — $10M from Nomura

  Only Chinese supply chain-independent rare earth refinery operating in the US.

• Realta Fusion — $9.5M from SVB / First Citizens Bank

  Compact magnetic mirror fusion energy systems developer.

• Dwelly — $50M from Trinity Capital

  AI-first UK property management platform.

• Motorway — £25M (~$31M USD) from Trinity Capital

  UK online used-car marketplace.

• Wonder — $12M from HSBC Innovation Banking

  Hong Kong-based omni-channel payments platform.

• Guardify — $3M from Flow Capital

  Digital evidence management platform.

• FirstWave Cloud Technology — AUD $2.5M from Partners for Growth

  Australian cybersecurity platform.

Platform & Capital Moves

• BC Partners Credit completed acquisition of Runway Growth Capital

  Integration of Runway's venture lending platform into BC Partners' broader credit franchise.

• P10 acquiring Stellus Capital Management for $250M

  Stellus manages approximately $3.8B in assets. Transaction advances P10's expansion in private credit.

• Horizon Technology Finance and Monroe Capital merger progressing

  Regulatory and shareholder approvals advancing. Combined entity expected to be a more competitive force in venture lending.

• Oaktree — $2.4B first close on Special Situations Fund IV

  Record first close with a target of approximately $5B. Per Bloomberg.

• Hamilton Lane — ~$2B close on Infrastructure Opportunities Fund II

  Second vintage of the firm's infrastructure-focused private credit strategy.

• Viola Credit — Three simultaneous fund raises closed

  Israel-headquartered tech-focused lender closing multiple vehicles concurrently.

• Claret Capital Partners — €350M+ second close

  European venture debt manager continuing to scale its latest fund.

• Blue Owl — $1.4B secondary sale at 99.7% of par

  Portfolio of private credit assets sold at near-par pricing amid LP redemption pressure. Signals portfolio quality while reflecting broader liquidity dynamics.

• HSBC Innovation Banking — $150M venture debt strategy launched in Australia

  Expansion of HSBC's innovation banking franchise into the Australian market.

• European Commission and EIB Group — BioTechEU targeting €10B

  Joint initiative to mobilize public and private capital in support of European biotech development.

• Clio Capital — Embedded working capital financing for law firms

  New product launch targeting legal sector working capital needs through embedded financing.

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