Stride closes India venture debt fund on $200m

The fund was launched in May 2021 with a greenshoe option to raise up to INR18.7 billion. A first close of INR 5.5bn was achieved three months later with strong support from existing LPs. Stride’s debut closed on INR 3.5bn in February 2021.

Fund II will write larger cheques than its predecessor – of up to INR 750m – with a view to backing more later-stage start-ups in light of India’s emerging IPO opportunity for tech and online businesses. Focus verticals include B2B commerce, healthcare, agriculture, financial services, and direct-to-consumer brands.

Venture debt provides start-ups with a funding option that is less dilutionary on equity while offering LPs a lower risk profile with regular returns. It is still an emerging product in Asia but relatively well developed in India, with recent activity including Alteria Capital closing its second fund at INR 18bn. The firm described it as the largest-ever pool of debt capital available for local start-ups.

Stride was founded in 2019 by Ishpreet Singh Gandhi (pictured), formerly of Yes Bank and Kotak Mahindra Bank. It claims to pursue a relationship-driven approach to the asset class with customised debt products shaped by specific business requirements.

The firm has made more than 60 investments to date, while its portfolio companies have raised some USD 4bn combined. Standouts include make-up brand MyGlamm, used car marketplace Spinny, and B2B platform operators Infra.Market and Zetwerk.

B2B services has become a significant area of focus, with recent investments including small business lender Progcap and Detect Technologies, a risk assessment and workplace safety software provider. Detect closed a USD 28m Series B round last month led by Prosus ventures.

Last year, the managing directors of the firm, including Gandhi, launched a separate credit platform called StrideOne that offers short-term credit products to B2B technology start-ups.

The idea is to improve companies’ interactions with small-business clients by providing unsecured personal and business loans to vendors, buyers or other stakeholders in the start-up ecosystem.

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• Topics
• South Asia
• Fundraising
• Credit/Special Situations
• Technology
• India
• Stride Ventures
• venture debt