Stride Ventures, a venture financing business, has closed the Stride Ventures India Fund II at $200 million for on lending to startups. According to a press release, the $200 million investments for the ‘Stride Ventures India Fund II’ final close came from banks, family offices, corporate treasuries, sovereign funds, private equity funds, insurance firms, and high net worth individuals.
The second fund will be used to invest in 60-70 startups. The average ticket price will be between $4 and $5 million. The business announced the fund’s initial closing in August 2021 at INR 550 crore of the projected corpus of INR 1,000 crore, which may be increased by INR 875 crore through a greenshoe option.
The closing occurred amid what has been described as a “funding winter” in the startup sector and a period when founders’ interest in non-dilution of ownership was growing, making venture debt more appealing than venture capital, where equity holdings must be diluted.
Stride, founded in 2019 by Ishpreet Singh Gandhi, offers complete solutions beyond venture debt to address the unique difficulties encountered by high-growth firms funded by prominent VCs.
The business presently has a diverse portfolio of more than 70 firms in consumer, fintech, agritech, B2B commerce, healthtech, B2B SaaS, mobility, and energy solutions, with investments totaling over INR 1,600 crore.
Ishpreet Singh Gandhi, Founder, and Managing Partner, Stride Ventures, said, “Stride Ventures has already committed a large portion of the fund in industry-leading startups, and our goal is to continue being a preferred lender while developing innovative alternate financing solutions for founders.”
The venture debt fund model in India has now evolved
The sector-agnostic fund invests in consumer, fintech, agri-tech, B2B commerce, health-tech, B2B SaaS, mobility, and energy solutions (EV). Stride Ventures works closely with founders and fundamentally sound firms supported by noteworthy venture investors through the fund.
CredAvenue (Yubi), MyGlamm, Zepto, BluSmart, Uni, Upstox, WayCool, MensaBrands, MediBuddy, Wiz Freight, Perfios, Moneyview, VideoVerse, Chalo, and Groyyo are among the companies in the fund’s portfolio.
As late-stage and growth-stage money has dried up due to the fundraising slowdown, many firms have hurried to obtain debt capital to prolong their active runways, mainly to pay their working capital and operational expenditure requirements.
However, most venture debt investors only invest in firms that have already raised at least 1-2 rounds of equity money. Convertible notes are another investment vehicle that allows these investors to convert debt into equity shares in the future.
In India, the venture debt fund concept has matured into an acceptable standard for startup funding and has been widely embraced by every single provider in the market.