InnoVen Capital may invest $100 million in Indian start-ups this year

New Delhi: Temasek-backed InnoVen Capital may invest up to $90-100 million in Indian start-ups this year if the right opportunities emerge, the venture debt firm’s India head said.

InnoVen Capital, counted among the largest venture capital lending firms in the country, having backed over 110 firms, loaned $75 million to start-ups in 2017, up 25% from a year earlier.

“Internally our expectation is to grow in double digits. This is also a function of how much equity capital comes in these start-ups, but we clearly see that we will grow over what we grew in 2017,” said Ashish Sharma, chief executive officer of InnoVen Capital India.

“For us, capital is not a concern, it is a question of risk-return and finding the right opportunities,” he added.

Sharma, who was earlier head of GE Capital in India, took over as InnoVen’s India chief executive in October last year after top executives Vinod Murali and Ajay Hattangdi moved out to launch their own fund.

Higher allocation in 2017 was on account of a number of InnoVen’s portfolio firms raising large growth rounds where the venture debt fund participated.

Besides a Rs100 crore investment in Yatra.com, its other big deals included Rs50 crore each poured into Oyo Rooms and logistics firm Black Buck.

“In the last four months of the year, our pace of deployment also doubled. The average ticket size grew from Rs10 crore to Rs20-22 crore largely on account of repeat business,” said Sharma.

Follow-on funding is also likely to be a sizable portion of deployment in 2018.

“There are a number of companies (in our portfolio) that have reached a stage where in the next few years they will require growth capital as well as debt capital,” said Sharma.

He also noted that business-to-business firms, such as those in the enterprise technology and logistics sectors, among others, are likely to generate higher demand for capital this year as compared to major business-to-consumer sectors.

“I think the proportion of B2B (business-to-business) is increasing versus B2C (business-to-consumer). B2B could be enterprise tech, it could be logistics… Fintech is also a space that is growing rapidly and we see a lot of interest there from an equity and venture debt standpoint,” said Sharma.

In the year gone by, InnoVen Capital also launched operations in China, where it will look to aggressively deploy capital.

InnoVen had its beginnings as SVB India Finance in 2008 in Mumbai and from there expanded to south-east Asia through an office in Singapore.

The firm was later taken over by Temasek, Singapore’s sovereign wealth fund, and United Oversees Bank, in 2015 and rechristened InnoVen Capital.