Fintech is expected to be the most active sector in raising debt followed by consumer and agritech, as per a survey conducted by , a leading venture debt firm in India. The survey showcases the mindset of founders and venture capital firms and also upcoming trends of venture debt in India.
India Venture Debt Report 2022 - conducted across founders and venture capitalists highlights the emerging use cases of venture debt as an asset class. It indicates that 100 percent founders of growth-stage companies are certain of raising venture debt as compared to early-stage founders (85.7 percent) and late-stage founders (66.7 percent).
Commenting on the maiden venture debt report, Ishpreet Singh Gandhi, Founder, Stride Ventures said,
“Venture debt has seen exceptional growth and has emerged as an important asset class over the years. The startup ecosystem, which is flourishing in India, will play a key role in creating multiple opportunities for venture debt to scale further.
Through our distinctive ‘India Venture Debt Report 2022’, our aim is to showcase the rise, developments and outlook of the venture debt ecosystem while creating awareness amongst founders about the several benefits of raising funds through venture debt in tandem with equity.”
Here are some of the key highlights of the report -
● In 2021, a total of $538 million of venture debt was disbursed as compared to $271 million in 2020.
● The fintech sector saw 28 percent of all venture debt deals, the highest among all sectors in 2021 followed by consumer at 21 percent and B2B commerce at 16 percent. The fintech sector also received the majority of investments at 47 percent.
● Companies which are in Series D and beyond stages saw the most deals (31) raising $250 million in 2021 followed by Series A stage companies who have raised $112 million.
● The average ticket size of venture debt deals in 2021 was $5.85 million.
● The average equity funding raised by venture debt backed startups in 2021 was $126 million.
According to the data collected, the rise of the venture debt ecosystem is indicated by the fact that in the last five to six years, the amount of venture debt disbursed has increased over 10 times and has doubled in the last one year.
The year 2021 saw 111 companies raising funds through debt of which 91 were unique. Geographically, Bengaluru saw the most number of venture debt deals, accounting for 40 percent followed by Delhi NCR at 27 percent and Mumbai at 18 percent.
Edited by Anju Narayanan