InnoVen Capital launches its first China venture debt fund

VENTURE debt provider InnoVen Capital has launched a China fund, its third fund-launch in recent months after its South-east Asia and India funds.

The firm, a joint venture between Temasek-owned Seviora and UOB, is mananaging external capital for the first time. The InnoVen China Fund has completed its first close of US$50 million with InnoVen Capital as its anchor investor.

Venture debt is a form of financing for startups wanting to extend their cash runway while minimising equity dilution.

Yingxue Cao, who has been leading InnoVen's China business since 2017 and has more than 15 years of experience in debt capital markets, will be heading the China fund as managing partner.

InnoVen said its China unit has completed about 100 transactions and backed more than 70 high-growth startups since 2017, with cumulative disbursements of more than US$300 million. It said 6 of the portfolio companies became unicorns, and 4 listed in US.

"With the new China fund, we can offer flexible and efficient financing solutions to more companies across the consumer, enterprise service and technology sectors, and provide follow-on financings to them as they scale their business," said Cao.

InnoVen's budding structure mirrors that of Temasek's venture capital (VC) unit Vertex Holdings, which evolved from a VC entity to an investment holding company anchoring a global network of Vertex funds.

Such a structure has enabled the funds to raise more capital from a diverse range of investors while giving the fund managers more operational independence.