InnoVen Capital doubles deployment pace, aims to fund more startups

InnoVen Capital, a venture debt and specialty lending business saw its growth rate double in the financial year 2016-17 according to Q4 results. InnoVen funded USD 85 million to 45 companies of which 31 were new additions to the rapidly expanding and diversified portfolio.

Among the investment, the largest venture debt deal done in the country till date was Rs.55 crores lended to Oyo, an Indian aggregator of standardised hotel rooms.

In the last quarter, USD 37 million was disbursed to 17 companies. As on March 31, 2017, InnoVen Capital funded USD 225 million to over 100 companies in India across 150 transactions.

In addition to Oyo, other companies recently funded include Swiggy (online food ordering and delivery service), Nestaway (managed home rental spaces),and Pepperfry(online furniture and home decor marketplace); aggregate funding being USD 30 million.

Almost 50 percent of the debt deals done in the year were with companies that had raised up to Series B equity round, consistent with the investment philosophy of InnoVen Capital to fund startups across stages. During the year, InnoVen also closed seven syndication transactions for select portfolio companies under InnoVen Credit Assistance Program ('InnoVenCAP')which helps maturing companies meet their working capital or capital expenditure needs through conventional forms of debt finance in partnership with banks

"The Indian private debt market is an area of keen interest currently and venture debt is emerging as one of the pillars of this attractive opportunity. Venture debt has gained a strong level of adoption across lifecycle stages of startups with increasing interest from growth stage companies. It is difficult for conventional lenders to embrace loss making, high growth startups but there is a clear need for alternative sources of capital for founders with minimal dilution," said Vinod Murali, Deputy CEO India, InnoVen Capital.

"It is heartening to see that the focus across most startups has shifted decisively towards profitability and better unit economics Vs expensive growth, which allows for sustainable businesses to be built on better foundations," he added.