Venture debt firm InnoVen Capital in deals with KFit and Pomelo Fashion
By Digital News Asia March 23, 2016
- Among 20 SEA, Indian and Chinese companies InnoVen has identified
- Venture debt an alternate source of funding for startups
UNITED Overseas Bank (UOB) and Temasek joint venture InnoVen Capital said it has signed two venture debt financing agreements with two startups: Malaysian fitness-sharing platform KFit and Thai online fashion startup Pomelo Fashion (pic above).
These startups are among the 20 Southeast Asian, Indian and Chinese companies which InnoVen has identified for venture debt funding in the next six months, it said in a statement.
They are in sectors such as e-commerce, financial technology (fintech), logistics and big data, it added.
InnoVen was set up in 2015 with the aim of providing high-growth and innovative Asian startups with up to US$500 million in venture debt loans over the next five years. UOB and Temasek have each committed up to US$100 million in paid-up capital to InnoVen.
Venture debt financing is a funding option for startups which do not want to give up equity, and which probably do not qualify for a bank loan.
In Malaysia, Malaysia Debt Ventures Bhd (MDV) has been providing such a facility since 2002, while Singapore’s DBS Bank launched a similar fund in February last year.
In its statement, InnoVen said it will provide loans totalling US$5 million to help KFit and Pomelo cater to the fitness habits and fashion trends of Asia’s growing affluent population, which is expected to account for two-thirds of the world’s middle class consumers or about 3.2 billion people by 2030.
Venture debt is important in nurturing Asia’s entrepreneurs and in encouraging innovation, said Eric Tham, managing director and head of Group Commercial Banking at UOB.
“For a startup such as Pomelo, funding is often critical as we accelerate our growth, expand into new markets, and invest in new capabilities,” said Pomelo Fashion cofounder Casey Liang.
“The venture debt from Innoven will help us accomplish these goals more efficiently. Innoven … was able to tailor a financing structure that met our business needs,” he added.
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