Fuels Capital has expanded its asset-backed lending model to offer loans of up to €25 million to European founder-led businesses. The Stockholm-based private credit firm says its analysis shows 25% to 30% of Europe's mid-market companies cannot access mainstream funding.
The move is aimed at companies that fall outside the usual criteria for bank lending, private credit funds and bond markets, despite holding assets that can serve as security. Fuels Capital lends against real estate, financial assets, unlisted shares and other assets with underlying value.
The firm has also added senior dealmaking experience, appointing Gabriella Sahlman as Co-Founder and Managing Partner. Sahlman previously co-founded Proventus Capital Partners and worked with the European private credit team at Ninety One.
Fuels Capital was founded in Stockholm in 2025 as a business unit within financial services venture builder and investor 0TO9. Since launch, it has generated €8 million in annual recurring revenue and is now expanding across northern and western Europe.
Funding gap
Fuels Capital argues that while Europe's private credit market has grown quickly, much of that capital still goes to private-equity-backed borrowers. It cited recent Financial Times reporting that private-equity-backed companies account for only 5% to 10% of investable businesses in Europe, yet receive 89% of private credit.
That leaves a large group of owner-led and entrepreneurial businesses with limited options when they need debt finance. According to European Commission data cited by Fuels Capital, the annual debt financing gap for European businesses stands at €39 billion, while between 982,000 and 1.4 million financially viable businesses are turned away each year.
The shortfall is particularly visible in asset-based finance. Non-bank lenders hold 13% of the European market, compared with 34% in the US, according to figures cited by the firm.
Mainstream lenders continue to focus on sponsor-backed, cash-flow-based and more predictable transactions. Fuels Capital, by contrast, is targeting businesses with more complex ownership structures, mixed assets or transitional funding needs.
Market focus
Asset-backed lending has long been used in areas such as property and structured finance, but its broader use in the European mid-market remains relatively limited. Fuels Capital is positioning itself in that gap by increasing ticket sizes and broadening the pool of assets it will consider as collateral.
In the past year, the firm financed more than 50 companies and reviewed more than 300 cases in Sweden. The new lending range is intended to support growth-stage companies, entrepreneur-led businesses and ventures in transition that may be rejected by traditional lenders.
Fuels Capital also says it uses AI-supported credit intelligence in its underwriting process, although it provided no further detail on how those systems are applied in credit decisions. Its central pitch to borrowers is that founders can secure debt without giving up equity.
That message is likely to resonate in parts of the market where business owners are reluctant to dilute their holdings to raise growth capital. In Europe, founder-led companies often rely on bank debt, retained earnings or equity from family offices and private investors, while more complex borrowers can struggle to fit the risk models used by larger lenders.
Sahlman said the concentration of private credit capital around private-equity-backed borrowers had left many entrepreneurs underserved.
"Private credit is booming, but the companies that need it most are still being turned away. The market has concentrated around private-equity-backed, cash-flow-based deals. Entrepreneurs, the ones building Europe's industrial base, don't always fit that template. Without capital at the right moment, growth stalls, or founders are forced to surrender equity they should never have had to give away. That's the gap Fuels Capital was built to close," said Sahlman.
Gerum linked the issue to Europe's wider investment needs and argued that many lenders still avoid more complicated transactions.
"Mario Draghi said Europe needs up to €800 billion in annual private investment to stay competitive. That investment has to come from somewhere, but right now, the system is keeping it from the businesses that need it most. That's because most lenders walk away from complex situations because their models aren't built for it. Ours is," said Gerum.