Venture debt picking pace in India: InnoVen invested $59M in 35 startups in 2016

InnoVen continues to actively co-invest in diverse sectors such as e-commerce, food-tech, logistics, education, enterprise-tech and healthcare

InnoVen Capital, a venture debt and specialty lending business in India, has announced the deals done in the last quarter of 2016 and aggregate funds disbursed in the year.

During Q4 2016, InnoVen extended debt funding of more than INR 110 crore ($16 million) in 13 new deals, whilst its deployment for the year totaled to almost INR 400 crore ($59 million) across 43 loans to 35 startups of which 26 were new additions to the portfolio.

Since its inception, InnoVen has provided over INR 1,260 crore ($184.8 million) in venture debt across 140 deals from diverse sectors.

Those funded in the last three months include Swiggy (food ordering and delivery service), Coverfox (online insurance provider), Furlenco (furniture rental company), Flyrobe (apparel rental company), Zelo (branded PGs), Unbxd (site search and product recommendation solutions), Surewaves (advertising platform). The list also include reinvestments in XpressBees (e-commerce logistics) and Universal Sportsbiz (celebrity fashion brands). InnoVen continues to actively co-invest in diverse sectors such as e-commerce, food-tech, logistics, education, enterprise-tech and healthcare.

Out of the total funding, 55% comprised of venture debt to early-stage companies whereas 45% was growth capital to businesses that are relatively larger. Furthermore, InnoVen also provided cross border funding to Capillary Technologies and Simplilearn to finance their global operations.

Recently, the firm also launched InnoVen Credit Assistance Program (InnoVen CAP) in order to help select portfolio companies meet their working capital or capital expenditure needs in partnership with banks to structure debt solutions that can optimize overall cash flow efficiency for these businesses.

Commenting on the year gone by, Vinod Murali, Managing Director, InnoVen Capital, said: “Venture debt is steadily getting established as an important component of funding rounds. Our ability to fund cheque sizes ranging from INR2 crore to  INR50 crore allows us to straddle different lifecycle stages of companies. We are also actively exploring debt funding for growth-stage non-VC backed companies as well, which have the ability to show differentiation that translates to enterprise value.”

“In these cases, our underwriting approach is a little bit different but we try and restrict this to new economy sectors where there is familiarity. India continues to be an attractive startup ecosystem but the recent phase of recalibration is a good wake up call to ensure value meets capital appropriately where venture debt, similar to equity, continues to be available in strong supply but the bar for good businesses has gone up sharply,” he added.

Started in 2008, InnoVen is a venture lending platform providing debt capital to high growth ventures. The platform offers multiple debt capital solutions, including venture debt, acquisition finance, growth loans, and syndication.

Till date, InnoVen Capital India has provided 140 loans to more than 90 startups across stages, including Swiggy, Yatra, Byju’s, Snapdeal, Freecharge, Myntra, Oyo, Practo, Portea, and Voonik among others and certain mature companies not backed by venture capital investors.