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Venture capital investment sees strong rise in H1 2021



Venture capital investment sees strong rise in H1 2021

Chennai: A lesser-known form of venture capital financing – venture capital – has surged in the first half of CY 2021, with nearly $170 million in venture debt deals completed, compared to $55 million in H2 2020 and $64 million in H1 2020 data from Venture Intelligence. Total deal numbers and average deal size are also at an all-time high, venture debt firms say, as late-stage startup founders find new and specialized use cases for venture debt with clearer business models. They also hold venture capital stock rounds to have better leverage on their books, and look for more product variations in addition to term loans, and are considering options such as invoice financing, vendor financing, etc., she added.
Venture debt firm Alteria Capital said it funded more than 20 companies with total commitments of $90 million in the first half of 2021 in what could be the largest implementation in a six-month period. Some recent deals include investments in Infra.Market, Dealshare, Bharatpe, Rebel Foods, Mensa Brands.
“One sector that has been in the spotlight recently is the Thrasio model, where we partnered with Mensa Brands with a $10 million upfront payment,” said Vinod Murali, managing partner of Alteria Capital. For the Thrasio model — where consumer brands are identified and acquired — leverage has to be in place to make the model attractive, and as major stock controls roll in, debt has also proven to be a key component, he added.
Ashish Sharma, CEO of InnoVen Capital, said that with more venture capital available, more startups are starting fundraising, and some of these entrepreneurs are trying to mix both equity and debt into their rounds. “More equity means a better ability of the startup to service its debt and so the equity boom has been positive for venture capital,” he added. Another venture capitalist BlackSoil said it closed nearly 4x the number of deals in H1-2021 compared to the same period last year, and despite the second wave, payouts also hit an all-time high. “A healthy pipeline will see us make nearly Rs 300-Rs 350 crore in cumulative risk debt disbursements this calendar year,” said Ankur Bansal, co-founder and director of BlackSoil. Ishpreet Singh Gandhi, founder and managing partner of venture capital firm Stride Ventures, notes that startups are also taking on debt to finance acquisitions amid strong consolidation in certain sectors, in addition to conventional working capital financing and job renewal cases. “The venture capital market is becoming aggressive. In the past month alone, Stride Ventures has announced five to six deals,” he added.
While venture capital accounts for about 15% of the total venture capital market in the US, here in India it still has a share of less than 5% and still has a long way to go.

Venture capital investment sees strong rise in H1 2021

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