Genesis Alternative Ventures launches US$150 million second venture debt fund
Benjamin Cher
VENTURE debt provider, Genesis Alternative Ventures, has launched its second venture debt fund, with a target of US$150 million. About half of fund II’s target has been raised at the first close earlier in Aug.
The first close had 80 per cent of fund commitments come from existing limited partners, Sassoon Investment, Aozora Bank, Korea Development Bank, Mizuho Leasing and Silverhorn among others. New investors also include OurCrowd, an Israel-based global venture investing platform.
“Fund II’s mission is to continue the work we’ve done in Fund I, but also to expand the mandate into growth debt. This allows us to invest into later stage companies who are looking for more debt financing,” said Dr. Jeremy Loh, co-founder and managing partner, Genesis Alternative Ventures.
Fund I has financed 25 companies from Series A to pre-IPO across business sectors. Matterport, a global spatial data company and Akulaku, a banking and digital finance platform in South-east Asia are 2 unicorns in Fund I’s portfolio.
As South-east Asia’s startup ecosystem matures, the region is seeing more late stage companies delaying their initial public offerings (IPO) on capital markets. As such these companies will need less dilutive capital to grow, where growth debt will find a market there.
“We are firm believers that venture debt will play an important role for start-up founders who are confident of their business growth and recognise the long-term value in complementary financing for working capital and other needs,” said Victor Sassoon, chairman, Sassoon Investment.
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The targets for Fund II will be similar to Fund I, high-growth tech startups with backing from venture capital investors. The target startups are also in the early growth stage, having raised a few rounds of funding with revenue on the books.
The venture debt provider is also looking for profit with a purpose or companies looking to deliver a positive impact to societies and the environment. Almost all companies that Genesis Alternative Ventures has invested in have executed their environmental, social and governance side letter.
“We started in 2020, we thought we might not find any companies that are impactful, and that startups would be adverse to ESG. But in fact when we explain how it works, most of them agree that it is a hygiene factor for themselves as well,” said Loh.
Genesis Alternative Ventures already has a US$60 million pipeline in place for Fund II, with opportunities to deploy the funds raised from the first close. .
“While the pace of investing may have slowed due to economic headwinds, interest in Southeast Asia technology companies remains strong. Given the record amount raised by venture capital funds in the last year, there’s a lot of dry powder for start-ups with strong fundamentals,” said Loh.
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