Singapore's Genesis hits first close on second venture debt fund

The firm began reaching out to investors late last year and formally launched in early 2022. About 80% of the capital in the first close - which came last month - is from existing LPs. These include Sassoon Investment Corp, Aozora Bank, Korea Development Bank, Mizuho Leasing, and Silverhorn Investment Advisors, as well as various family offices, trusts, fund-of-funds, and corporations.

Notable new investors include Israeli crowdfunding portal OurCrowd. Ben Benjamin, one of the four founders of Genesis, was previously an angel investor at OurCrowd Singapore.

Sassoon was the anchor investor of Fund I, which closed on USD 90m in 2021 after two years in the market. That fund is now fully deployed across 25 companies and is sometimes touted as the first independent venture debt fund in Southeast Asia.

Benjamin (pictured second from left) established Genesis in 2018 alongside Martin Tang, Jeremy Loh, and Eddy Ng (pictured first, third, and fourth from left), who each helped set up DBS Bank’s venture debt business in 2015.

“In 2015, it was really about educating the ecosystem about what venture debt is. Today, venture debt has become more of a normality,” Loh told AVCJ.

“Founders are not just looking at venture debt for lower dilutive capital but also as a way of doing business and optimising their cost of capital. Beyond equity, venture debt has now become a complementary way of financing for the start-up ecosystem in Southeast Asia.”

Fund II will pursue largely the same strategy as its predecessor, although there will be scope for larger deals (up to USD 10m), later-stage deals, and follow-on investments. As with Fund I, there are likely to be about 25 companies. No investments have been made to date but the pipeline includes some late-stage companies.

Fund I performance is underpinned by two unicorns, Matterport and Akulaku. 

Matterport is a US-based company that helps the real estate industry provide 3D virtual property tours. Genesis supported its expansion into Southeast Asia and exited when it listed on NASDAQ through a merger with a special purpose acquisition company (SPAC). Akulaku is an Indonesian finance platform that raised a USD 100m Series C round in February.

Genesis has also made a significant feature of its environmental, social, and governance (ESG) credentials. About 40% of Fund I companies are considered “impactful” and 80% are said to have adopted ESG practices. But this has not moved the needle with LPs.

“The solid interest really lies in the venture lending aspects rather than impact and ESG. It’s a good-to-have for us, not a must-have,” Loh added.

“It’s beginning to grow [in Southeast Asia]. When we first took up this challenge of looking for impactful businesses and start-ups that will adopt ESG practices, we were a bit sceptical given how early they are in terms of the ecosystem. But a lot of the start-ups are keen to make it a part of their businesses because it helps them do business better and open them up to a whole new range of investors.”

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• Topics
• Southeast Asia
• Fundraising
• Credit/Special Situations
• Venture
• Singapore
• Korea Development Bank
• venture debt
• Genesis Alternative Ventures