MA Growth, One Ventures tip debt surge for startup M&A, ASX 'take privates'
Private markets operatives predict smaller high growth ASX firms and unlisted startups will increasingly lean on debt to fuel growth as equity markets remain frozen.
Private market participants are tipping emerging ASX companies and unlisted startups to increasingly rely on higher yielding debt products to fuel their growth, including for acquisitions of competitors or even to leave the exchange in "take private" deals.
MA Growth director Alex Mount told Capital Brief the firm expects an uptick in ASX-listed companies looking to go private in the next two years as part of an ongoing shrinking of the exchange.
With equity raisings proving dilutive in the current market the obvious way for them to fund this would be through raising venture credit, he said, something that has not really existed in Australia until now.
"Now is the time for this product,” he said. "The US venture debt market has grown rapidly in the past decade, coinciding with the maturation of their VC market. The Australian venture debt market is nascent but set to follow the US as our VC market matures".
