Data storage company Actifio, which raised money at a $1.1 billion valuation in 2014, borrowed $10 million this year from a venture debt fund. But the interest rate on the loan had a minimum interest rate of 8.75%, up from 8.25% for a loan it took out last year. Other fees went up as well, raising the total cost by another 0.25 percentage points.
Actifio isn’t unusual. The cost of borrowing has ticked up for some private tech companies this year. It’s a reaction to flattening valuations in the private tech equity markets, where money isn’t as plentiful as it was. That is increasing startup demands for loans and giving lenders more power.