Venture debt firm InnoVen Capital has launched a new fund focusing on Southeast Asia, the company said on Tuesday. The firm has completed the first close of its InnoVen SEA Fund with USD 50 million, and it will seek additional investors to take part in the next stage of fundraising. InnoVen aims to complete the second close of its Southeast Asia fund six months from now.
The new fund will be led by partners Paul Ong and Ben Cheah, who have led investments in over 50 companies in the region, including Carsome, Ruangguru, Tiki, eFishery, and Akulaku. The firm has disbursed over USD 180 million in loans for regional startups so far.
Venture debt has gained popularity among Asian startups in the past five years. “From the founders’ standpoint, venture debt is an additional avenue of capital that allows founders to control their dilution better,” Ong told KrASIA. This type of financing gives a higher certainty of returns with fast and predictable cashflow distributions to investors while maintaining exposure to equity upsides, he added.
InnoVen SEA Fund will invest in growing companies from Series A onward, with check sizes ranging from USD 500,000 to USD 10 million. “We are typically sector-agnostic. However, we provide follow-on loans to existing portfolio companies as they continue to grow,” Ong said. For startups, the rule of thumb is 20–25% of venture debt can be provided based on equity financing, he added.
Established in 2015, InnoVen Capital has disbursed USD 900 million for tech companies in India, China, and Southeast Asia. “We have more than 20 portfolio companies that have achieved unicorn status. Building on the track record of our team, the launch of the InnoVen SEA Fund will allow investors to participate in our growing franchise in Southeast Asia,” said InnoVen Capital’s executive director Ong Beng Teck in an official statement.