InnoVen Capital started out as SVB India Finance in 2008. The objective was to build a venture debt business which would offer venture capital firms and their portfolio companies the ability to access alternative forms of capital.
They were excited to see the growing vibrant entrepreneurial environment in India starting from about 2005-06. The growing number of entrepreneurs with high quality ideas and the entry of several new venture capital firms had led to significant growth in venture capital investments and highs in new business creation in India.
While early-stage businesses were relatively well-served by sources of equity finance, the market was characterized by a virtual lack of debt funding alternatives. The gap between the demand for growth capital alternatives from the growing number of VC-backed early-stage companies,and the inability of existing commercial banks in India to cater to their needs created a need for a lender that understood emerging and high growth companies. This insight provided us with an opportunity to invest in establishing a specialized lending business at that time.
Q: How has the journey of InnoVen Capital been with regards to its recent milestone, winning an award for being the Best Venture Lending Firm 2017 – Asia?
A: The award is validation for the team’s efforts at crafting a unique business over the past years focused on providing a more holistic and global approach rather than just funding solutions. They believe that while funding is important, it is only one part of what it takes to make companies successful. They therefore deliver a number of initiatives designed to support start-ups in other ways.
Programs like InnoVenConnect and InnoVenSupport provide companies with a range of market access programs and business connections within our network. InnoVenResearch seeks to educate ecosystem participants and policy makers through a number of signature research reports on topics relevant to the start-up and angel environment. Finally, through its partnerships with angel groups, incubators and accelerators such as Microsoft Accelerator, InnoVen Capital provides young teams and start-ups with opportunities to engage with tools, mentors and investors to begin their entrepreneurial journey. This focus to provide a more holistic approach rather than just funding solutions sets apart InnoVen Capital’s platform.
Another dimension of our work is built around recognizing that startups are going global much earlier in their lifecycle. Companies need funding and other support globally as they expand beyond the borders of their home countries. We have crafted a global platform which allows us to serve our clients from offices across Asia.
Q: How is the Indian private debt currently for startups?
A: Venture capital was at a relatively nascent stage when we first started lending in 2008. There was limited understanding and appreciation for our debt program at that time. Market education was a large part of our initial calling effort in the market.
These early initiatives along with the decade long experience in working with the team has led to much more awareness today among investors and founders alike on the benefits of adding debt into the funding mix as well as the types of situations where debt can potentially enhance investment returns.
The role of venture debt in supporting entrepreneurship has also found strong backers in organizations like SIDBI which is proposing a number of initiatives to help support the availability venture debt.Venture debt has grown to keep pace with the growth in venture capital flows as the ecosystem has continued to mature. Finally, InnoVen’s clients benefit from the India team’s experience of spanning almost a decade in venture loans in the market.
Q: What are your expectation from the venture market for the upcoming months in FY-2016-17?
A: India has witnessed strong economic growth driven by a combination of strong macro fundamentals, large scale improvements in business infrastructure, favorable demographics, and growing consumer spending. While the current local investment climate presents some challenges for the industry, India’s long-term growth story remains compelling with the country expected to have one of the strongest growth prospects in global regions over the long term.
Q: Share you investment plans, aims or objective that you plan to achieve through your firm this year?
A: InnoVen Capital will continue to target growth in its key markets of India, China and South East Asia especially as these venture ecosystems continue to mature and grow.
Source: BW Disrupt
