Synthetic royalties hit $4.7 billion in transactions in 2025, a 50% increase over 2024.
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But most people have no idea what a synthetic royalty is, so let me explain it simply:
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A traditional royalty means you acquire someone's IP, think a pharma patent or a music
catalog. You buy the IP, then collect the royalty it generates.

A synthetic royalty is different, you don't acquire the IP at all. Instead, you acquire a
contractual right to a share of future revenues. You create the royalty stream synthetically,
through a purchase agreement directly with the business.
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A synthetic royalty can be created from any revenue stream that has a strong identifiable IP
and a contractual entitlement to a revenue stream. Enterprise Software is one application, but
there are many others.
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For any company with strong embedded IP and for example with EUR 10-100m in recurring
revenue, it works like this:
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Althera42 purchases the right on 2-10 % of monthly revenues going forward. The purchase
price is fresh liquidity for the company that has sold the revenue right and it can use the
liquidity for investments into growth, M&A, technological development or for providing
liquidity to shareholders.
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The business keeps full ownership, keeps control, and doesn't take on a single euro of debt.
There is no rigid repayment schedule, and no equity dilution.
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The payments scale with revenues. When the business grows, we grow with it. When
revenues dip, the payments dip too. There is no cash-flow mismatch, which is exactly what
triggers defaults in traditional lending.

This is why the use of synthetic royalties is growing at record speed.
Business leaders are realizing that a EUR 20m loan with a fixed amortization schedule is
actually one of the riskiest things you can put on a growing company. Why take the risk if
you can use a royalty instead?
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We are at the beginning of a big shift towards royalties as a household investment instrument
in the IP-based economy, and the data confirms it.

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