Eco-system News Archives

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19 May 2021/ by CrestBridge

With market awareness of venture debt low, it is private debt’s best kept secret. That hasn’t stopped venture debt from substantially growing its market share of the start-up ecosystem.

Here are 5 reasons why this under-utilised asset class will boom over the next 3 years:

It is a growth powerhouse with $47b worth of assets under management in 2021.
There are only a few venture debt managers in the market right now.
Start-ups like not giving up their equity in return for a cash injection.
The returns are high relative to other fixed income investments.
The rise of SPACs complements venture debt.

Read the full article here.

An article written by Venture Capital Journal. Read the full article here.

Venture debt is growing faster than traditional equity financing and faster than the wider VC market, according to a recent PitchBook report titled Venture Debt a Maturing Market in VC.

It thus “makes sense that the growth of venture debt has outpaced the broader VC market,” the report noted. “More companies receiving institutional venture backing equals more potential borrowers for lenders, in many ways making venture debt a dependent variable.”

The PitchBook report claimed venture debt has been split evenly between early and late-stage companies over the last decade in terms of financing count. ButPitchBook’s methodology treats convertible loans as venture debt, which is hugely popular in the early-stage.

“Recently, even seed-stage loans have caught up [to late stage], largely because of the increased use of convertible notes for these investments,” the report said.

Read the full article here.

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An exciting development in the venture lending space as an established bank officially launches its venture lending ambition. Validating the venture debt model!

https://www.scmp.com/business/banking-finance/article/3013853/hsbc-sets-us880-million-technology-fund-find-next-tencent

(content reposted from original article in weblink above)

As companies are looking to cash in on the potential of uniting the infrastructure and development of the Greater Bay Area,

HSBC said on Tuesday that it is creating a US$880 million technology fund to provide financing to early stage companies in the region. The GBA+ Technology Fund will focus on lending to high-growth companies in mainland China, Macau and Hong Kong in a variety of sectors, including e-commerce, financial technology (fintech), robotics, biotech and health care technology, HSBC said. “Lending money is not the sole purpose. We want to create a lasting relationship with our customers,” said HSBC’s head of commercial banking in Hong Kong Terence Chiu. “We’re not transactional. That’s never been our strategy in 154 years.”

5 Reasons By Venture Debt Will Go Through The Roof In The Next 3 Years

Venture Debt Fit to Outpace Wider VC Market

HSBC sets up US$880 million technology fund to find the next Tencent or DJI in southern China’s Greater Bay Area