Venture debt disbursed in India nearly doubled from $271 million in 2019 to $538 million in 2021. Experts say the drying up of the equity markets is a key factor for the increased demand. And the momentum isn't expected to slow down
As the macroeconomic environment sours and venture capital (VC) investors slow their pace of writing cheques, startups have turned to venture lenders who provide debt financing. “Earlier we used to strike one out of 10 deals. Now, we are assessing 20 companies before closing a deal,” says Apoorva Sharma of Stride Ventures, one of the six key venture debt providers in the Indian market. Last year, the New Delhi-headquartered company deployed Rs1,100 crore (approximately $134 million) over 60 transactions. This year, the figure is already Rs1,300 crore ($159 million) till September.
In fact, the amount of debt disbursed through venture debt in India doubled in 2021 to $538 million, up from $271 million in 2019, according to Stride Ventures’ India Venture Debt Report 2022. One-hundred-and-eleven companies raised venture debt, including Mensa Brands, Urban Company, and Licious, with ticket sizes ranging from $2 million to $25 million.