Genesis Alternative Ventures raises US$125 million for second fund; Philip Yeo joins advisory board
Majority of investors are returning investors from the venture lender’s first fund
GENESIS Alternative Ventures has raised US$125 million in a final close for its second venture-debt fund focused on South-east Asia.
The majority of investors are returning investors from the venture lender’s first fund, including Sassoon Investment Corporation, Korea Development Bank, Silverhorn and Japan’s Aozora Bank and Mizuho Leasing. New investors in the second fund include Mizuho Bank and US-based investing platform OurCrowd.
The current slowdown in fundraising has affected both fund managers and startup founders, but as Ben J Benjamin, co-founder and partner at Genesis, put it, it is business as usual.
“There is never an easy time to raise money, it’s just more difficult sometimes, and this has been a challenging period,” he told The Business Times.
There is appetite for this kind of product, as evidenced by investors’ capital commitments, and Genesis is seeing opportunities in its deal pipeline. About 20 per cent of the fund has already been deployed to startups like drone service provider Aonic, orthodontics startup Zenyum and e-commerce returns startup Returnkey.
Yasuhiro Kubota, managing executive officer and co-chief executive officer for the Asia-Pacific at Mizuho Bank, said: “We are delighted to come on board with Genesis on a shared vision in the venture-debt space. South-east Asia continues to be an exciting region with a thriving start-up ecosystem.”
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There was a deliberate attempt to moderate the amount to raise, with the fund size smaller than what venture capital funds have raised in the last two years. With a target of between US$120 to US$150 million, the fund has hit its mark, said Benjamin.
Dr Jeremy Loh, co-founder and partner at Genesis, said: “It’s a right-size fund, given the ecosystem we’re in, and it’s already quite an increase from the first fund (US$80 million).”
The venture lender is seeing opportunities now in three buckets:
- Traditional venture debt, which augments an equity round without diluting it;
- Profitable startups looking for debt capital to power growth; and
- Startups looking for capital to execute mergers and acquisitions.
With these new ways of utilising debt, more companies are now open to doing a deal with Genesis.
For now, venture debt is still the main contributor of business for the venture lender, but Dr Loh puts it down to many not being savvy with debt. The presence of larger players (such as HSBC) in the venture debt ecosystem has helped it mature more quickly, filling a missing piece of the puzzle in the region.
In a separate development, Philip Yeo, former chairman of the Singapore Economic Development Board, has joined the advisory board at Genesis.
Dr Loh said: “We are also delighted to welcome Mr Philip Yeo to our Advisory Board, a true statesman and visionary in the technology and investment space.”
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