BackStride Ventures marks first close of ₹500 crore venture debt fund
A first close allows a fund to begin deploying the capital raised, even as it raises moreThe firm was founded was Ishpreet Gandhi, who was earlier with IDFC First Bank, leading the coverage of foreign multinational firms’ debt opportunities
PremiumStride Ventures, which provides loans to startups, said on Monday that it has raised ₹100 crore to mark the first close of its maiden venture debt fund.
A first close allows a fund to begin deploying the capital raised, even as it raises more. It plans to raise ₹500 crore for the fund, with current investors (limited partners) including high networth individuals and family offices.
The firm was founded was Ishpreet Gandhi, who was earlier with IDFC First Bank, leading the coverage of foreign multinational firms’ debt opportunities.
“We see this as exciting times to provide debt in the current startup ecosystem. The real debt for scalable business is significantly missing," said Gandhi, founder and managing partner at Stride.
The fund wants to “activate the financial ecosystem for worthy startups need of the working capital & other financial requirements for growth of their business. We also believe in working closely with these businesses on the ground," he added.
The fund plans to invest in 35-40 startups over the next 3 years with loan tenures of 1-1.5 years.
The other partners at Stride Ventures include Avtar Monga, who was earlier Chief Operating Officer and Executive Director at IDFC First Bank, and Abhinav Suri, who headed corporate credit at IDFC First.
Venture debt has become an increasingly important source of funding for startups. It helps founders raise money without diluting stake, provides runway for a few months, and provides a boost prior to an equity fundraise. However, debt generally makes sense for businesses with a stable cash flow and cannot be seen as a substitute to venture capital, but as an addition.
Three firms currently dominate the Indian venture debt landscape- Temasek-owned InnoVen Capital, Alteria Capital and Trifecta Capital. While Alteria is currently deploying from its ₹960 crore first fund, Trifecta is currently in discussions to raise a ₹750 crore second fund. InnoVen raised $200 million from its parent Temasek and United Overseas Bank to invest in startups across South East Asia and China.
Mint reported on June 19 that venture debt deals are rising as investors use the avenue to double down on existing portfolio companies and find new companies to invest in. Barring deals in new companies, these companies also made over a dozen investments each in existing portfolio firms, indicating rising interest and acceptance of the asset class.
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