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In a tech ecosystem affected by an uncertain environment, could venture debt be a white knight to save startups in Southeast Asia?

Venture debt, a type of financing typically used by early-stage companies and startups, first gained prominence in Southeast Asia around 2015. In the US, however, it has long been a fixture on the market, with 35-year old industry pioneer Silicon Valley Bank (SVB) backing around 50% of venture-capital-backed companies with IPOs in 2017.

Venture debt brings significant benefit as a complementary form of financing as capital that is almost equivalent to equity without dilution. For small and medium enterprises (SMEs), debt capital can also bring an optimum cost of capital.

– Jeremy Loh, Co-founder and managing partner at Genesis Alternative Ventures

General financing parameters in venture debt have not changed much, despite recent variability in demand and market conditions in wake of COVID-19, according to Loh. Genesis Alternative Ventures typically funds between USD 1 to USD 5 million dollars, while Innoven Capital typically carries out a 20% funding round with loan durations typically among two to three years long, similar to pre-COVID financing structures.

Both venture debt providers emphasized that their general funding structure and terms remain sensitive to the company’s purpose. In addition, bespoke conditions may be offered to tailor to each company’s circumstances.

Yet, despite the arguably increasing popularity of venture debt in Southeast Asia, it is yet too early to conclude that this will become a mainstream form of financing for startups, even with COVID-19 as an accelerator of change, and promising venture debt providers like Innoven Capital and Genesis Alternative Ventures in play

Read the full article here:

https://kr-asia.com/will-venture-debt-be-a-white-knight-for-startups-in-southeast-asia


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When start-ups accept money from venture capitalists, the founders are often asked to give up a significant portion of their ownership in return for additional equity financing. Venture debt funding is an alternative way for start-ups to raise funds, minus the equity dilution.

When you have to sell equity in your company to raise money to buy, for example, depreciating assets, it is an expensive exercise.

-Ben Benjamin, Co-founder and partner of Genesis Alternative Ventures

The venture debt business model also benefits the venture fund as it brings about at least two streams of income. The first is the interest payable on the loan from the borrower, and the other is warrants. But why would a start-up turn to a venture-debt fund instead of a bank for a loan?

Banks have more stringent requirements and criteria when approving loans to companies. The banks typically want some semblance of earnings before they are willing to lend. The very nature of start-ups is often prioritising growth over profitability, which unchecks this box right away. This is where Genesis comes in.

Read the full article from The Edge Singapore here.


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The Business Times

US-based global impact investment firm Capria Ventures has invested in Genesis Alternative Ventures Fund 1, a Singapore-based private venture debt fund, as a springboard into South-east Asia (SEA).

Full Business Times article (11 June 2020)



Reuters

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said.

Full Reuters article (11 June 2020)



e27

Genesis Alternative Ventures, a private venture debt fund in Singapore, has secured an undisclosed amount of investment from American global investment fund Capria, as it looks to double down on investing in impact-focussed startups.

Full e27 article (11 June 2020)



Yahoo Finance

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.

Full Yahoo Finance article (11 June 2020)



Singapore Business Review

The firm, founded in 2018, has invested in a significant and diverse number of startups to date, including cybersecurity company Horangi, coworking space GoWork, co-living startup Hmlet, cloud-based platform Matterport, and mobile connectivity company Lynk Global. 

Full Singapore Business Review article (11 June 2020)



AVCJ

Genesis was established last year by Jeremy Loh and Martin Tang, both formerly of the venture debt unit at DBS Bank, and Ben Benjamin, an angel investor and non-executive director at OurCrowd Singapore

Full AVCJ article (11 June 2020)



Alpha Maven

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said

Full Alpha Maven – Hedge Maven article (11 June 2020)



The Star

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said.

Full The Star article (11 June 2020)



Nasdaq

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.

Full Nasdaq article (11 June 2020)



SGSME

US-based global impact investment firm Capria Ventures has invested in Genesis Alternative Ventures Fund 1, a Singapore-based private venture debt fund, as a springboard into South-east Asia (SEA). This is Capria’s first investment in the region, where it sees plenty of opportunities to make an impact on societies through its investments. 

Full SGSME.SG article (11 June 2020)



Startups in Southeast Asia Krasia
KrASIA

One of the reasons Genesis captured Capria’s attention was the fund’s ability to generate returns in a shorter time frame than venture equity funds, which typically take up to 10 years to reap potential profits. “That is actually quite attractive to a lot of investors who want yield and significant upside,” Mr Richards said.

Full KrAsia article (11 June 2020)



Deal Street Asia

Genesis has now secured Capria Ventures, an IFC and Vulcan Capital-backed US investor, as an LP in its maiden fund. The investment marks Capria’s first investment in Southeast Asia and its first venture-debt fund investment globally.

Full Deal Street Asia article (11 June 2020)



Intellasia

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said. 

Full Intellasia East Asia News article (12 June 2020)



Singapore Business Review

Genesis plans to leverage on Capria’s expertise in impact investing to fund companies that have meaningful objectives such as financial inclusion, sustainability, small business digitisation, and gender diversity as it accelerates its growth across Southeast Asia

Full Singapore Business Review article (12 June 2020)



Citywire

Genesis Alternative Ventures Fund I backs growth-stage companies with impact objectives such as financial inclusion, sustainable food production, small business digitisation and gender diversity, that are looking to scale across Southeast Asia.

Full Citywire article (12 June 2020)



AEC News Today

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said. — Reuters

Full AEC News Today article (12 June 2020)



INVC

Genesis now plans to hold on to Capria’s expertise in impact investing to fund companies that have meaningful goals such as financial inclusion, sustainability, small business digitisation, and gender diversity as it expands itself across Southeast Asia.

Full Investocracy article (13 June 2020)



e27

Genesis Alternative Ventures on debunking venture debt myths and finding winners in SEA. They also share tips on how to identify “impact washers” — companies who claimed to have a sustainable social impact in their operations.

Full e27 article (18 June 2020)



Venture Capital Journal

Singapore-based Genesis is targeting $70m for its debut vehicle and already collecting commitments from international foundations and LPs.

Full Venture Capital Journal article (17 June 2020)