As a part of its strategy to take advantage of the expanding venture debt market in India, Stride Ventures has announced the first closing of its third fund at a $100 million amount. This occurs when macroeconomic headwinds have caused a sharp decline in private equity investment.
In a statement on May 9, Stride Ventures stated that it will raise an additional $100 million for the fund’s ultimate closing. After getting a license for the fund, the business was able to raise the money in four months.
For venture capital and venture debt businesses, the first closure marks a crucial turning point in the process, after which the funds are deployed.
A venture debt agreement is a loan given by a lender to a startup without diluting its ownership. It is typically granted in conjunction with an equity offering or a few months after a round’s closure.
By 2025, $3–4 billion in annual deployment is anticipated for the Indian venture financing industry, according to Stride Ventures. Among the companies the company has supported are Sugar Cosmetics, The Good Glamm Group, Mensa Brands, Exotel, Yubi, MoneyView, VideoVerse, Miko, Perfios, HealthifyMe, Ace Turtle, and Waycool.
Ishpreet Gandhi, the founder and managing partner of Stride Ventures, said, “Stride takes immense pride in being the largest contributor of credit to new-age businesses that has sanctioned over approximately Rs 5,000 crore in the Indian startup ecosystem.”
Gandhi continued, “Stride Ventures’ success in providing value to its investors is a credit to our rigorous procedures and solid internal governance systems.”
The company said that it had effectively disbursed more than 100% of its promises, including principle redemptions and coupon distributions, to Fund 1’s early investors.
It also said that, without naming them, a variety of institutional investors, including family offices, banks, and insurance firms, supported its third fund.
According to the firm, it would invest through the fund in rapidly expanding businesses that have solid business plans, good unit economics, and knowledgeable management teams.
An increase in venture loan demand in India coincides with the first closing of Stride Ventures’ third venture debt fund. Moneycontrol noted in its report from the previous year that debt businesses deployed $312 million in the first eight months of 2022, an increase of 11% over the same period in the prior year, despite a general decline in investor confidence brought on by rising interest rates.
“As businesses try to optimize their capital structures and hold onto equity for the next rounds, we see a rising demand for venture debt. With the opening of our third fund, Stride Ventures is well-positioned to satisfy the distinct financial needs and international aspirations of Indian businesses, according to Apoorva Sharma, Managing Partner at Stride Ventures.
The firm, which was established in 2019, has so far raised three funds. The venture debt company concluded its second fund in August of last year with a $200 million corpus.
