"I don't know what venture debt is, but I want me some, please"

Thanks to Covid and the uncertainties it brings, venture debt is being seen as a quick option for companies to finance in Southeast Asia. But many companies and venture capitalists remain unsure about venture debt and its uses, the most important being it’s not for all

Covid-19 has brought venture debt to the fore as companies explore various funding options

Regional venture debt firms InnoVen Capital and Genesis Alternative saw queries surge at least 30% in March and April

If used correctly, venture debt is a cheaper option compared to equity financing for startups to acquire working capital

But here’s the catch: it’s a loan. It needs to be repaid, on time, which may not be an easy feat for a growing startup

Home to more than 10 emerging markets, Southeast Asia has been attracting large sums of venture capital venture capital The Ken Ad-venture capital: Southeast Asia’s VCs are scaling as fast as the startups they fund Read more from all over the world. Startups in the region amassed US$7.6 billion—non-unicorns managed some US$2.5 billion—from investors in just the first six months of 2019, according to the e-Conomy SEA report report Bain, Google, Temasek e-Conomy SEA 2019 Read more .

AUTHOR

Ka Kay Lum

Based in Kuala Lumpur, Ka Kay covers investment activities, aka following the money, across Southeast Asia and in-depth stories on the often-overlooked Malaysian startup ecosystem. She was previously a regional writer for Nikkei-owned DealStreetAsia.

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AUTHOR

Benjamin Cher

Based in Singapore, Ben covers news and stories from the hub of Southeast Asia. He covers the intersection of technology and business, and how it affects Singapore and Southeast Asia. Ben was previously a reporter at The Edge Singapore.

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