Venture debt firm InnoVen Capital India closes the first half of 2018 by disbursing Rs 300 crore; aims to invest remainder of the committed Rs 418 crore in the next two months.
Debt-financing firm InnoVen Capital recently announced that it had disbursed Rs 300 crore of a committed Rs 418 crore in the first half of the year. The firm claimed to have recorded a 30 percent growth in the same period. InnoVen is expected to invest the rest of the capital in the next two months.
The team has added 10 new companies to its portfolio this year, including Eruditus, Elastic Run, FreshMenu, Flintobox, Lucideus, and Ziploan. They also have follow-on funding for existing portfolio companies, with close to 350 percent growth from H1 2017.
Some of InnoVen India’s follow-on funding transactions include Pepperfry, Power2SME, Chaipoint, Capillary, Treebo, Bizongo, Epigamia, and Shadowfax. Of the total disbursements in H12018, close to 60 percent was contributed by follow-on funding to existing portfolio companies to support them through their growth journey. InnoVen closed 22 transactions in the first half.
Speaking of the major sectors that received debt financing from InnoVen, Ashish Sharma, CEO, InnoVen Capital said,
“Although we are sector agnostic, during the first half of 2018, the split is 65 percent B2C and 35 percent B2B. The key sectors we have invested in include companies from enterprise tech/SaaS, logistics, foodtech, education, B2B marketplaces, and robotics.”
As of the end of June 2018, InnoVen Capital India had cumulatively funded venture debt worth over $330 million in more than 120 innovative tech startups across India.
While the team looks at several factors like sector dynamics, competitive landscape, value proposition, product-market fit, unit economics, and others, Ashish said what they were really looking for were passionate founders with the vision to disrupt a large addressable market and the ability to execute well.
“We only back companies that have raised some institutional equity. Further, the quality of the investors, their thesis, and insights form an integral part of our evaluation,” Ashish said.
Venture debt is a relatively new asset class in India but it’s starting to come into the mainstream. Most founders and investors know how it works and when to opt for it, and many startups have already benefited from it.
“We observe more and more startups warming up to venture debt as they look to optimise their capital structure while reducing dilution. We continue to derive our strength from our well-diversified portfolio, strong relationships, and a global footprint across India, Southeast Asia, and China,” Ashish said.
He said close to Rs 1,000 crore was disbursed last year. InnoVen expects the market will grow by 15-25 percent, depending on the funding environment.
“In the first half of 2018, our assessment is that close to Rs 600- Rs 650 crore of venture debt has been disbursed. We expect the pace of funding to remain strong during the second half,” Ashish said.