Private lender Genesis Alternative Startups, which supports startups and growth-stage businesses, closed its second loan fund below target because foreign investors are still wary of Southeast Asia’s startup scene.
The Singaporean company secured additional investors, such as Israel’s OurCrowd Ltd. and Japan’s Mizuho Bank, to raise $125 million for the fund, which will support startup businesses throughout Southeast Asia. The fund took almost two years to close, having sought between $120 and $180 million.
Private lender Genesis Alternative startups, which supports startups and growth-stage businesses, closed its second loan fund below target because foreign investors are still wary of Southeast Asia’s startup scene.
The Singaporean company secured additional investors, such as Israel’s OurCrowd Ltd. and Japan’s Mizuho Bank, to raise $125 million for the fund, which will support startup businesses throughout Southeast Asia. The fund took almost two years to close, having sought between $120 and $180 million.
In recent quarters, there has been an increasing interest in venture lending, or loans given to startups, as more businesses choose to use the debt market rather than raise equity. The values of computer businesses have been severely damaged by a bleak prognosis for the global economy, and venture capital firms have been finding it difficult to raise money in the midst of a sluggish market for IPOs. Nevertheless, because many of its still-unprofitable businesses are seen as high-risk by global venture capitalists, Southeast Asia continues to be a difficult market for raising both financing and equity.
“It’s never easy to raise funds, and it’s been more difficult in this environment,” Genesis managing partner and co-founder Jeremy Loh stated in an interview. “This is a period of time where founders must be able to demonstrate that they can grow at a sustainable pace without relying on too much equity.”
Aozora Bank Ltd., Korea Development Bank, and Silverhorn Group were among the more than 80% of investors in Genesis’s inaugural fund who also made investments in its most recent fund.
Nine firms, including Aonic, Eezee Pte, and Akulaku Inc., have already received more than $20 million in loans from the second fund, according to Loh. Because businesses lack collateral or aren’t yet profitable, entrepreneurs that don’t often qualify for standard bank loans are given credit by Genesis. In Southeast Asia, the company’s initial $90 million fund has supported 25 firms, ranging from Series A to pre-IPO. Among its portfolio firms are the online lender Akulaku, located in Jakarta, and the buy-now, pay-later startup Pace.Singaporean Venture Capital Raises Startup Debt Fund Despite Low Valuations