LC Venture Debt Fund
about lc venture debt fund
The Fund seeks to empower early and growth stage companies in India and South East Asia, providing them capital to scale without significantly diluting equity. The region's venture debt market has the potential to scale up by 4 - 5x over the next few years. The Fund presents investors a unique opportunity to participate in a fast growing venture debt segment.
Portfolio Companies
Why this fund
Provide senior-secured loans, with an equity upside, to 35 - 40 companies at stages Series A and above with a ticket size of US$1 to US$5 million.
Managed by experienced credit professionals with combined experience of over 25 years in institutions such as IFC, GIC, Deutsche Bank and with investment and asset management experience of over US$1 billion in Asia.
Sector-agnostic mandate with focus on partnering with companies with strong business fundamentals and run by passionate founders.
The Venture Debt Opportunity
In older venture ecosystems such as US and Europe, Venture Debt has been in the range of 15-20% of total VC funding
- In US, c.US$30b has been loaned to VC-backed companies during each of the past three years. On a steady-state level (2021 year being an exception due to record VC funding), venture debt has been 18-20% of the total VC funding in US.
- Of the total venture debt loaned, tech startups have attracted c.75% of overall funds.
- Venture debt has grown at an extremely rapid pace in Europe since its introduction in the late 1990s.
- In line with the US market, venture debt in Europe forms a considerable share as a % of VC financing and accounts for an average of 15% of the total VC funding.
Venture debt in India and SEA is a more recent phenomenon – it is highly underpenetrated and will grow at a rapid pace on back of rising share (as a percentage of VC funding) and higher VC inflows over the next 5 years
- Venture debt entered relatively late in India, in the year 2015, and remains significantly underpenetrated, compared to US and Europe markets.
- 2020 was a breakout year for venture debt in India when the total venture debt funds raised jumped 2x to c.US$400m.
- The estimated venture debt market opportunity in India is US$3-4b based on current VC funding rate.
- Venture debt in SEA emerged in 2015 boosted by efforts of the Singapore Government locally.
- Data is scarce on venture debt activity in SEA but is expected to be in line with Indian market given the similarities in venture funding activity.
- Given the above, the estimated venture debt market opportunity in SEA is US$2.5-3b based on current VC funding rate.
Team
Sanket Sinha
Portfolio Manager, LC Supply Chain Credit Fund
Sanket has over 10 years of experience during which he co-founded a fintech venture, WealthPack (later acquired by Edelweiss), which was a personal finance application aggregating customer’s accounts in real time. Before that, he was a founding employee and Head of Portfolio and Credit at X10 Financial Services, a Non-Banking Financial Company (NBFC) which provided supply chain financing to SMEs in India.
Ankit Agrawal
Portfolio Manager, LC Venture Debt Fund
Ankit has over 11 years of experience focused on investments across the capital stack (private equity, long term and structured debt). Prior to joining Lighthouse Canton, Ankit has led and managed equity and debt investments in his roles with the International Finance Corporation (IFC), GIC, and the Piramal Group. He has overseen portfolios and transactions of over US$500mn in various sectors including manufacturing, agribusiness, hospitality, logistics, real estate, healthcare and more.