InnoVen Capital is Asia's largest venture debt provider
Paul Ong · 300 Portfolio Companies Later, 22 Became Unicorns Without Diluting · Dec 1, 2021 · at 3:04
Paul Ong, partner at Innoven Capital Southeast Asia, introduces his firm and its regional footprint across India, China, and Singapore.
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“Innovin Capital is Asia's largest venture debt provider with offices in India, in China, as well as in Singapore for the Southeast Asian region.”
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InnoVen Capital backed 22 unicorns from a $500M AUM fund
“We have grown to about a half a billion in AUM. We've worked with over 300 portfolio companies. We're lucky to count 22 of them that have grown into unicorns.”
Venture debt dilution savings primarily benefit startup founders, not the company
“Now, if it's a matter of dilution, or if it's a matter of wanting to cheapen your cost of capital, that cost Savings. Typically it's to the founder and not to the company. If I, as a founder raise equity, I'm diluting my shares. If I, as a founder raise debt, …”
Startups using lump-sum bullet debt repayments become less alluring to future VCs
“And what we've realized is that companies that don't deleverage, let's say you borrowed five million, prefer to pay Five million all at one shot after like two years or three years. That takes away from the allure of a company in the eyes of potential future i…”
Founders use venture debt to boost valuations ahead of future equity rounds
“So essentially what you are doing is you are leveraging the dollars that you bring in as a founder to unlock Even more capital to bring you nearer term value such that when you need to go out to market again, you incorporate that value into your valuation, for…”
InnoVen receives venture debt leads from VCs for specific structural use cases
“We get more introductions from VCs when there's a specific utility, a specific use case that they want us to explore. So for example, if a B to B SaaS company has a growing receivables book, or if a hardware company needs, you know, more financing to for inven…”
InnoVen specifically targets unprofitable, cash-burning technology startups for venture debt
“The kind of companies that we look for as a start, they are companies that
Are in the technology space and that they're burning money.
So they're not profitable.
There's still a cash burn for growth, et cetera.”