Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Measure Better Investing in Racial Equity Beyond Aid Beyond Trade-offs Impact en las Americas New Revivalists Women Rising in India Operation Impact
Smarter Money Women Rising 2030 Finance Locavesting Inclusive Economy Regeneration Impact Tech New Power Geographies
Slack Conference Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Industry News Impact Management Good Business Personal Finance Faith and investing Billionaires
Gender Lens Investing Women Rising in India
SDGs Climate Finance Clean Energy Innovative Finance Full Stack Capital Long-termism
Opportunity Zones Investing in place
Entrepreneurship Return on Inclusion Good Jobs Inclusive Fintech Creative economy Housing New Schooled Well Being People on the Move
Conservation Finance Farmer Finance Financing Fish
Blockchain/AI/IoT Urban Tech Food Tech Inclusive Fintech
Human Rights Democracy and Peace News and Information
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States Growth Markets
Subscribe Log In

Debt financing signals maturing Indian startup market

Equity gets the glory, but sometimes it’s debt that gets the job done. Debt can finance day-to-day expenditures and allows companies to grow without ownership dilution or selling high-cost equity (see, Banking on the Poor: Using the Off-Grid Solar Revolution to Unlock Low-Income Credit in Africa).

Banking on the Poor: Using the Off-Grid Solar Revolution to Unlock Low-Income Credit in Africa

In India, startups received $1.2 billion in debt financing in 45 deals last year. That was nearly 10% of total startup funding, reports YourStory (see deal-sheet below). In 2017, venture-capital firm Unicorn India Ventures launched a debt fund, while venture debt funds Trifecta Capital, InnoVen, and IntelleGrow all increased investments. Blue Orchard and Triodos Investment Management, two impact funds, also made debt investments in India last year (see, State Bank of India backs small-business lender Lendingkart).

Such financing has only recently become available to young Indian companies. “Sometimes, supply creates demand. In the case of debt funding, there was latent demand,” Trifecta Capital’s Rahul Khanna told YourStory. Trifecta expects to deploy $40 million in debt this year.

In the US and UK, venture debt lagged venture capital by about 10 to 15 years. India’s startups may not need to wait as long.

Debt funding in 2017 l Image credit: Anisha

You might also like...