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The Singapore government-controlled Temasek Holdings has acquired debt financing company SVB India Finance for about ₹300 crore. This marks Temasek’s entry into the venture-debt lending market.
After the acquisition, SVB India Finance has been renamed InnoVen Capital India.
Till date, SVB India Finance has provided more than 75 loans to over 50 companies in India, totalling $110 million of venture debt. They include Prizm Payments, Snapdeal, Myntra, Freecharge, Manthan Software, Firstcry, Faasos, Practo, and Capillary Technologies.
Ajay Hattangdi will continue to lead the company as CEO and MD while Vinod Murali will be Managing Director and responsible for leading the India deal team.
“The deal took place in January and we received the RBI’s approval now. This deal will help us now take this product across Asia. Venture Capital activity is growing leaps and bounds in India and we are seeing great potential,” said Murali.
InnoVen Capital provides venture debt after evaluating venture-backed early-stage and mid-growth companies that have got equity funding, helping them reduce dilution of equity.
Entrepreneurship focus “We provide them more capital in the form of structured debt so that the companies can extend their cash flow runway…Our focus is on entrepreneurship and start-up companies and we do not deal in real estate or any retail products,” he added.
InnoVen Capital provides debt funding in the range of half a million dollars to $4-5 million (from ₹3-30 crore) typically averaging a tenure of 2-3 years per transaction (funding), which may also get follow-on funding.
“Temasek is committed to this platform as part of a broader pan-Asian venture debt-financing initiative. India is a central piece of that initiative. We believe that the platform will be attractive to the start-up community in India — entrepreneurs, venture capitalists and angel investors — not just in the context of promoting the growth of innovative companies in India but also for their expansion as they seek to venture beyond India,” said Ong Beng Teck, Managing Director, Enterprise Development Group, Temasek.
InnoVen Capital India will be an independently managed entity with a reconstituted board of five members, including Madhabi Puri Buch, former CEO of ICICI Securities, as Chairperson.
As of March 31, 2014, India accounted for 4 per cent of Temasek’s net portfolio value, based on underlying assets. Direct exposure amounted to about 2 per cent.
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