Australia's Leap Capital raises $34m venture debt fund

"Early-stage start-ups can't support debt, and it doesn't make sense for them to take a loan, so you need the equity first, and then as the businesses grow, some of them can support a loan," Guy Reypert, a managing director at Leap, told The Australian Financial Review. LPs in the fund include about 150 high net worth individuals and family offices.

Leap was set up last year by Steven Sher, who spent 17 years with Goldman Sachs Principal Investments across its Sydney and London offices, as well as Gavin Solsky, the founder of Australian enterprise management services company Portland Group, which was acquired by India's Infosys in 2012. Reypert previously served as a VC fund manager for Fairfax Media.

Leap aims to provide 1-3 year loans to Australia and New Zealand-based companies generating more than A$4 million of revenue and growing at more than 20% a year. Investee businesses must either have a path to profitability within 18 months or a currently breakeven operation that requires additional funding for growth. They will be primarily technology-enabled companies.

Venture debt – which offers investors a lower risk profile while helping start-ups raise capital faster and with less ownership dilution – is still an emerging product in Asia Pacific but considered prospective for expanded uptake given its popularity in more established markets. Last year, OneVentures launched what was said to be Australia's first venture debt fund. It achieved a first close of A$45 million in April.

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• Topics
• Australasia
• Fundraising
• Credit/Special Situations
• Australia
• Growth capital
• venture debt