Co-investing venture debt alongside equity rounds is becoming crowded and competitive
Ankur Bansal · Ankur Bansal, BlackSoil Capital on Venture Debt funding in the Indian Startup Ecosystem · Sep 20, 2020 · at 4:21
Ankur Bansal, co-founder of BlackSoil Capital, explains why BlackSoil chose not to limit its venture debt investments to rounds where equity investors are actively participating.
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“That space we feel is a little bit crowded and getting competitive.”
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BlackSoil operates as an NBFC funded by permanent family office capital
“So, we are at NBFC, ah, unlike other venture debt funds, they have to raise money from multiple LPs and then return the capital at the end of the fund, which could be ranging from five, seven years to 10 years. We don't have that kind of, ah, sort of challenge…”
Startups should fund assets with debt and marketing burn with equity
“We started positioning ourselves on that the dead side to become your working capital partner, and use the money for creation of assets, whether that is business assets, KPEC assets, or even your working capital, and you use your equity money for burn, and you…”
BlackSoil deployed over ₹460 crore across 45 startup deals by 2020
“We have done almost 45 deals more than 400 and sixty-odd crores we have deployed.”
Startup fundraising cycles are lengthening, requiring founders to secure longer runways
“Fundraising in the last few years is taking only longer. It's not taking shorter, right? Unless there are some of the larger unicorn kind of companies different, but for some of the other, most of the largest startup companies, it's requires enough capital in …”
BlackSoil's venture debt interest rates range between 14% and 18%
“Our interest rates range between, ah, 14 to 18%.”
BlackSoil's average venture debt loan tenor ranges between 24 and 36 months
“Second is our loan tenor can range and we have done transactions as short as four months also, ah, at one off and we have done transaction as one off as five years also. But if you look at average tenor it will be between like 24 to 36 months.”