Stride hits first close on third India venture debt fund
India-based venture debt provider Stride Ventures has reached a first close of USD 100m on its third fund, which has an overall target of USD 200m.
The firm said the process took about four months and featured commitments from banks, insurance companies, and family offices.
Stride was founded in 2019 by Ishpreet Singh Gandhi (pictured), formerly of Yes Bank and Kotak Mahindra Bank, and looks to pursue a relationship-driven approach with customised debt products. The firm closed its second fund on USD 200m in August 2022, beating a target of INR 10bn (USD 125m). Its debut vehicle closed on INR 3.5bn in early 2021 and has since returned 100% of its principal to investors.
"We see a growing demand for venture debt as startups look to optimise their capital structure and preserve equity for future rounds," Apoorva Sharma, a managing partner at Stride, said in a statement.
Venture capital investment in India rose from USD 6.1bn in 2020 to USD 14.8bn in 2021 but fell to USD 11.9bn last year and only USD 2.2bn has been put to work in 2023 to date, according to AVCJ Research. With valuations falling and start-ups reluctant to consider down rounds, venture debt represents an alternative source of capital that can effectively extend their runway.
Stride claims to have screened more than 6,000 companies and invested in 100 across 15 sectors. Those companies have raised USD 8bn in aggregate funding. It prioritises start-ups with strong management teams, established VC backers, robust gross margins and operating cash flows, and a clear path to profitability.
The firm’s portfolio spans consumer, B2B commerce, software-as-a-service (SaaS), mobility, and technology-enabled financial services, agriculture, and healthcare. It includes the likes of WayCool Foods, Zepto, BluSmart, Groyyo, Ripplr, PepperFry, Spinny, HealthifyMe, Bira, and Mensa Brands.
Stride expects annual venture debt deployment in India – by all market participants – to reach USD 3bn-USD 4bn by 2025. Other recent fundraising activity in the space includes first closes for Alteria Capital and Anicut Capital on INR 10bn and INR 1.1bn, respectively.
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