Europe's Tech-Lending: The Future of Private Credit Investing?
This interview explores the rise of tech lending in Europe through a conversation with Atempo Growth - one of the continent’s leading funds in this segment - and Decalia, a Geneva-based investment management firm.
Founded in 2021, Atempo has quickly become a European leader in tech lending. Its solid track record - 20 percent historic weighted average deal IRR and an average LTV of 11.9 percent - demonstrates disciplined risk management and consistent returns. Backed by anchor investors such as Decalia, Banco Santander, the European Investment Bank, the British Business Bank, and the European Investment Fund, the second fund had its 2nd closing at 426 million euros, targeting 1 billion euros in AuM across two vintages in tech lending by the final close of Atempo II.
The secular growth of the European tech sector continues to boost borrower demand for flexible private credit solutions, complementing traditional VC and growth equity. In 2024, the market reached 35 billion dollars in the U.S. and 17 billion euros in Europe - an increase of more than 25 percent year-on-year. Yet Europe’s traditional banks remain ill-equipped to serve the rapidly expanding tech industry. In this scenario, tech lending is emerging as a strategic, risk-controlled investment opportunity.
Tech-lending is a form of private credit tailored for high-growth, innovation-driven companies that may not yet qualify for traditional bank financing. It provides flexible, low-dilution capital to help them scale or reach key milestones without turning to equity markets.
At Atempo, our funds feature well-structured loans with 36-48 month terms, low LTV (typically 7-14 percent), and senior security over all assets, targeting a deal-level IRR of 17-20%. Returns have been strong, with low defaults and little correlation to public markets, offering downside protection and diversification in private credit portfolios.
Unlike venture capital or growth equity, which rely on ownership stakes and valuation upside, Tech-lending is a senior secured credit strategy providing loans rather than equity. Returns are predictable, cash-flow oriented, and downside-protected without dependence on exit timing or multiples.
This distinction underpins the strength of Atempo’s track record. The historical loss rate has been around 3 percent, fully offset by warrants, highlighting disciplined risk management and the ability to generate reliable returns. The difference is also evident in distributions: thanks to the structured repayment profile, Atempo Growth I has already achieved a 42 percent net DPI just one semester after the end of its investment period and is expected to reach 50 percent by the end of 2025.
Tech-lending complements traditional direct lending. Its low correlation to other asset classes enhances diversification and yield, appealing to investors seeking income and growth with capital preservation.
Tech-lending offers five key advantages for investors:
Tech-lending has been used in our portfolio both for buy-and-build strategies, like consolidating in the European media sector, and for accelerating expansion in logistics.
CONCLUSION: European tech-lending offers a strategic, forward-looking opportunity to partner with high-quality companies, combining capital efficiency and disciplined risk management.
Jack Diamond is co-founding partner of Atempo Growth.
Founded in 2014, Decalia manages nearly 6 billion francs and partners with highly specialized managers in Private Markets.
Decalia backed the Atempo Growth team in launching their new fund franchise following their spin-out from Kreos Capital in 2021.
For more information, please contact Xavier Guillon at xgu@decalia.com.
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