DBS, Temasek launch US$500m growth stage debt financing platform for Asia's tech firms

SINGAPORE bank DBS and Temasek on Friday announced that they have entered into an agreement to jointly launch a US$500 million growth stage debt financing platform.

Headquartered in Singapore, EvolutionX Debt Capital will provide non-dilutive financing to growth stage tech companies across Asia, with a focus on China, India and South-east Asia.

The platform will look particularly at investment opportunities in an increasingly digital economy, spanning a range of sectors, including financial services, consumer, healthcare, education and industrial development.

The growth debt capital space presents a "significant opportunity", and this partnership is a segue to both DBS's and Temasek's existing early-stage debt initiatives and investment activities, both organisations said in a media statement on Friday.

EvolutionX will be led by joint interim chief executive officers (CEOs) Amit Sinha, head of telecoms, media and technology at DBS's Institutional Banking Group, and Aftab Mathur, Temasek's investment (innovation) director.

A full-time CEO will be appointed in the next few months.

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Tan Su Shan, DBS's group head of institutional banking, said growth debt is fast emerging as an alternative source of financing for high-growth technology companies that traditionally only raised equity as a source of capital.

Apart from helping founder entrepreneurs avoid dilution of share equity in the company's initial stages of development, growth debt is also a tool to tide these often cash-strapped companies through unexpected market and economic headwinds.

"The investment in EvolutionX provides an opportunity for us to play an integral role in nurturing and financing the growth of Asia's future unicorns, while forging partnerships and ecosystem opportunities with these high-growth technology-enabled companies," Ms Tan said.

Temasek's chief investment strategist Rohit Sipahimalani said: "Technology and digitisation will have a pervasive impact across many sectors, and will continue to transform our economies and communities.

"Temasek believes in the purposeful use of our capital to create and catalyse solutions for gaps we see today, to stimulate innovation and growth for long term, sustainable value."