Temasek, UOB commit a further US$200m to venture debt firm InnoVen

Singapore

ASIA venture debt firm InnoVen Capital has secured US$200 million of additional capital commitment from shareholders Temasek and United Overseas Bank (UOB) as it steps up its pursuit of startups in the region.

Each investor contributed US$100 million.

Singapore-based Innoven, which also has offices in India and China, said the funds will allow it to tap the potential in the venture debt space across Asia.

To date, it has supported more than 200 startups with over US$500 million in financing.

Chin Chao, chief executive of InnoVen Capital Singapore and South-east Asia, said the additional capital will allow the firm to engage even more startups.

"InnoVen has rapidly become the leading venture lender in South-east Asia, helping entrepreneurs accelerate their company's growth while minimising equity dilution," he said.

Venture debt companies like InnoVen, a UOB-Temasek joint venture set up in 2015, provide debt to high-growth companies still in the early stages of development.

The typical route for a startup is to raise money from traditional venture capital funds by giving up a stake in the company.

But if funds for expansion are needed before the next funding round, a startup might hesitate to go back to its earlier investors because the additional funding might come at the cost of equity dilution without a higher valuation. This makes venture debt a potentially more attractive alternative.

Mr Chao told The Business Times last month that InnoVen is aiming for 25 to 30 loans this year that translate to more than US$50 million in disbursements. Its portfolio companies include online retailer Pomelo Fashion, live-streaming firm M17 Entertainment, payments startup InstaReM and cloud software player Deskera.

InnoVen also has a presence in India. Ashish Sharma, CEO of InnoVen Capital India, said: "Access to additional equity capital along with the ability to leverage the balance sheet will position us well, as we drive an ambitious growth agenda."

InnoVen entered the China market a little over a year ago and has built a portfolio of nearly 30 startups across sectors in Asia's largest economy.