Varanium Capital Raises Rs 250 Crore For Debut Venture Debt Fund
Varanium Capital, an asset management firm, has announced the successful first closing of its debut venture debt fund, securing Rs 250 crore. The fund aims to invest in approximately 100 startups by utilising a combination of revenue-based financing and traditional venture debt. Prominent investors, including family offices, ultra-high-net-worth individuals (UHNIs), and notable entrepreneurs, including former bank CEOs and CXOs, have already committed to the fund.
Heading the management of the debt fund is Nawal Bachhuka, Principal at Varanium Capital and a former senior executive from IndusInd Bank. The experienced team also includes industry veterans such as former CEO Romesh Sobti, former CRO KS Sridhar, former head of corporate lending Suhail Chander, and former COO Paul Abraham. The investment committee comprises Varanium Group founder TS Anantakrishnan, venture capital partner Aparajit Bhandarkar, Suhail Chander, and KS Sridhar.
Founder of Varanium Capital, TS Anantakrishnan, highlighted the significance of the venture debt fund in providing vital financial support to startups operating in sectors such as D2C, SaaS, B2B commerce, and fintech, facilitating their growth and expansion. Additionally, the fund includes a green shoe option of Rs 50 crore, allowing for additional capital raising beyond the initial target corpus based on investor interest.
Varanium Capital manages a diverse portfolio of approximately $1 billion across multiple asset classes, including structured debt, portfolio management services (PMS), and venture capital funds. The company's fintech-focused equity fund has already made successful investments in 12 startups, including Easebuzz, Riskcovry, Finvu, and Homeville.
This development arises during a funding downturn within the startup ecosystem, leading investors and startups to explore alternative avenues for capital infusion. Noteworthy venture debt funds in India include Stride Ventures, Innoven Capital, Alteria Capital, and Trifecta Capital.
According to the India Venture Debt Report 2023 by Stride Ventures, the year 2022 witnessed a substantial disbursement of $800 million in venture debt to 120-130 companies through 170-180 deals across India. Comparatively, startups received $538 million in venture debt in 2021. The fintech sector dominated venture debt deals with a 31 per cent share, followed by the consumer space with 18 per cent and retail technology segment with 10 per cent. Notably, over half (51 per cent) of the venture debt amount in 2022 was deployed in Series D and beyond deals.
