As per the report, since 2019, capital disbursed through venture debt in India is set to grow by 2.6 times to around $800 million in 2022.
New Delhi: More than half of venture debt capital in India was deployed in Series D startups and beyond in 2022, according to a new report. Venture debt firm Stride Capital said in a report based on data from data intelligence firm Trackxn that the fintech sector witnessed the maximum number of deals, accounting for 52% of total venture lending.
“Venture debt has become one of the key growth enablers for Indian startups,” said Ishpreet Singh Gandhi, Founder and Managing Partner, Stride Ventures.
Venture debt is offered to startups, which are backed by venture capital firms. It is primarily a type of debt provided to early stage, high growth companies through dedicated funds as a supplement to equity financing.
As per the report, since 2019, capital disbursed through venture debt in India is set to grow by 2.6 times to around $800 million in 2022. These included startups like The Good Glam Group, Home Lane, Spinney, Sugar Cosmetics, UB, Jupiter, Money View, Mobikwik.
“Increased awareness of this asset class and positive investor outlook has enabled Venture Debt to more effectively demonstrate its non-dilutive attributes and potential to unlock growth.”
The country's venture loan market, still at a nascent stage, offers a huge opportunity to grow with the expanding startup ecosystem in the country. Apart from Stride, firms such as Innoven Capital, Alteria Capital, and Trifecta Capital are prominent players in the market offering venture loans.
"Founders and companies are clubbing equity rounds with venture debt to better leverage on their books," the report said.
Going forward, the report said, the business-to-business (B2B) sector is expected to attract the most venture debt capital in 2023, followed by the consumer and electronic vehicle sectors.
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