SINGAPORE: Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise US$50-$70 mil (RM213-RM298 mil) by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said.
A record number of start-ups have sprouted up in the region's key hubs of Singapore, Indonesia and Vietnam over the past five years but venture debt is still in its infancy as firms mainly depend on equity financing.
"From a demand perspective, there's a wide open space," Ben Benjamin, co-founder of Genesis, which also counts Indonesia's CIMB Niaga among its backers, said in an interview. "We have a fund target of US$50-$70 mil and are well underway to reach that by the early part of next year."
On Thursday, Capria, a Seattle-based global investment fund, said it had invested in Genesis' fund but gave no numbers.
Dave Richards, Capria's co-founder, said the region offered huge potential for start-ups to take on debt in their early growth phase, a trend well established in the United States and India.
"We are starting to see this take off in Southeast Asia as companies are really seeing the opportunity to raise a portfolio of capital from investor equity to various kinds of debt to help them keep growing faster," he said.
Benjamin, who set up Genesis in 2019 along with bankers Jeremy Loh and Martin Tang, said the firm expects to nearly treble its portfolio to about 15 companies in about a year as start-ups see the benefits of lower financing costs and smaller equity dilution.
Genesis' portfolio includes Singapore-based cyber security firm Horangi and Indonesian co-working space provider GoWork.
Loh said that since the coronavirus outbreak, Genesis had seen a big rise in enquiries, both from companies that traditionally raise equity and others seeking venture debt as additional financing. - June 11, 2020, Reuters