Genesis

In a tech ecosystem affected by an uncertain environment, could venture debt be a white knight to save startups in Southeast Asia?

Venture debt, a type of financing typically used by early-stage companies and startups, first gained prominence in Southeast Asia around 2015. In the US, however, it has long been a fixture on the market, with 35-year old industry pioneer Silicon Valley Bank (SVB) backing around 50% of venture-capital-backed companies with IPOs in 2017.

Venture debt brings significant benefit as a complementary form of financing as capital that is almost equivalent to equity without dilution. For small and medium enterprises (SMEs), debt capital can also bring an optimum cost of capital.
– Jeremy Loh, Co-founder and managing partner at Genesis Alternative Ventures

General financing parameters in venture debt have not changed much, despite recent variability in demand and market conditions in wake of COVID-19, according to Loh. Genesis Alternative Ventures typically funds between USD 1 to USD 5 million dollars, while Innoven Capital typically carries out a 20% funding round with loan durations typically among two to three years long, similar to pre-COVID financing structures.

Both venture debt providers emphasized that their general funding structure and terms remain sensitive to the company’s purpose. In addition, bespoke conditions may be offered to tailor to each company’s circumstances.

Yet, despite the arguably increasing popularity of venture debt in Southeast Asia, it is yet too early to conclude that this will become a mainstream form of financing for startups, even with COVID-19 as an accelerator of change, and promising venture debt providers like Innoven Capital and Genesis Alternative Ventures in play

Read the full article here:

https://kr-asia.com/will-venture-debt-be-a-white-knight-for-startups-in-southeast-asia

When start-ups accept money from venture capitalists, the founders are often asked to give up a significant portion of their ownership in return for additional equity financing. Venture debt funding is an alternative way for start-ups to raise funds, minus the equity dilution.

When you have to sell equity in your company to raise money to buy, for example, depreciating assets, it is an expensive exercise.
-Ben Benjamin, Co-founder and partner of Genesis Alternative Ventures

The venture debt business model also benefits the venture fund as it brings about at least two streams of income. The first is the interest payable on the loan from the borrower, and the other is warrants. But why would a start-up turn to a venture-debt fund instead of a bank for a loan?

Banks have more stringent requirements and criteria when approving loans to companies. The banks typically want some semblance of earnings before they are willing to lend. The very nature of start-ups is often prioritising growth over profitability, which unchecks this box right away. This is where Genesis comes in.

Read the full article from The Edge Singapore here.

Entrepreneur Peggy Choi On The Struggles She Faced Building Knowledge Sharing Platform, Lynk Global

Peggy Choi learnt what resilience was at 14, when she had major spinal surgery and was hospitalised for two months. Fast-forward, now she’s jumped into the world of entrepreneurship, faced-off gender stereotypes and proved countless investors wrong with the creation of her startup, Lynk Global—a knowledge sharing platform used across the globe.

Full Generationt Asia article (3 March 2021)

Matterport to Go Public Via Alec Gores SPAC in $2.9 Billion Deal

Matterport Inc., a maker of software for virtual walk-throughs of properties, agreed to go public through a merger with a blank-check company backed by billionaire Alec Gores.

Full Bloomberg article (8 February 2021)

Lynk, a “knowledge-as-a-service” platform with more than 840,000 experts, raises $24 million

Lynk, a “knowledge-as-a-service” platform that connects clients with over 840,000 experts in a wide range of fields, announced today it has raised $24 million led by Brewer Lane Ventures and MassMutual Ventures, with participation from Alibaba Entrepreneurs Fund.

Full Tech Crunch article (27 January 2020)

Global Real Estate Brands Adopt Matterport Capture Services to Accelerate Property Sales and Tenancy

Matterport today announced Matterport Capture Services™, a fully managed solution for enterprise customers to book 3D virtual tours with Matterport Capture Technicians™ skilled in using the Matterport Pro 2 camera.

Full Matterport article (1 July 2020)

Horangi Cyber Security Named In Gartner 2020 Market Guide for Compliance Automation Tools in DevOps

Horangi Cyber Security is a CREST-accredited SaaS company based in Singapore. Horangi Cyber Security, its product Warden, has been listed as a Representative Vendor in the Compliance Automation Tools in DevOps Vendors in Market Guide for Compliance Automation Tools in DevOps.

Full Horangi Cyber Security article (1 July 2020)

Jeremy Loh, co-founder and managing partner at Genesis Alternative Ventures, talks about the opportunities in venture debt, which involves lending money to early-stage firms and minimizes the dilution of a founder’s stake. Loh speaks with Haslinda Amin and Rishaad Salamat on “Bloomberg Markets: Asia.

(Source: Bloomberg)

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Welcome back to our webinar series, #GENZOOMS. In this episode, we will share stories about how our behaviours have changed from ‘Life after COVID’ to ‘Life with COVID’. So how does that change how we live, work, and shop, especially with the gradual re-opening of economies? Will e-Commerce spell the demise of retail? Will WFH mean that CoWorking spaces are irrelevant? What will CoLiving mean when there is social distancing?

Our host Martin Tang invited three panellists to dig more insights and stories about the situation.

Irwan Mussry, President and CEO of Time International
Vanessa Hendriadi, CEO and Co-Founder of GoWork
Sagar Khatri, VP and Corporate Development of Hmlet

There’s a good insight from Irwan Mussry where he stated that the e-Commerce and the brick and mortar should go hand in hand. And at the same time, Vanessa said that the flexible work arrangement is definitely here to stay.

Watch the full stories in the video below.

Watch the first episode of #GENZOOMS here: link

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We are very delighted to have our second episode of #GENZOOMS webinar series. In the past months we’ve noticed a lot of startups continue to raise money, despite the gloomy business outlook that accompanies the coronavirus. Are they lucky? Or did they simply have a well-executed fundraising plan?

Our host Martin Tang invited four panellists to uncover the secrets and get their insights and stories about the situation.

Steve Melhuish, Venture Partner of Wavemaker Partners
Junxian Lee, Co Founder of Moovaz
Kristin Lim, Director and Investments of Fundnel
Velisarios Kattoulas, CEO of Lanturn

Junxian Lee emphasised one of the important things is steadying the ship, and still being able to confident about the business model, and identified the areas that we need to tweak moving forward. That is helpful in giving investors’ confidence.

Discover the full stories in the video below.

Watch the third episode of #GENZOOMS here: link

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The PDF version of this media release can be downloaded here

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Global Investor Capria Fund invests in Singapore’s

Genesis Alternative Ventures

Seattle-based Capria makes first investment in Southeast Asia through venture debt asset class
Genesis to tap growing opportunities in impact investing amid strong growth in venture lending

Singapore, 11 June 2020 – Genesis Alternative Ventures Fund I, Southeast Asia’s first private venture debt fund, today welcomes a strategic investor – Capria, a Seattle- based global investment fund that invests in venture equity and innovative debt fund managers that deliver superior returns and impact at scale.here

Genesis will leverage Capria’s expertise in impact investing to identify and provide venture financing to companies with meaningful impact objectives such as financial inclusion, sustainable food production, small business digitisation, gender diversity, etc., as they scale across Southeast Asia.

Genesis is Capria’s first investment in Southeast Asia and its first investment in a venture debt fund.

Capria counts International Finance Corporation (IFC), Ford Foundation, Vulcan Capital, Omidyar Network, Sorenson Impact Foundation, among others as its investors. Capria also joins a growing list of blue-chip investors in Singapore-based Genesis, which includes Sassoon Investment Corporation (SassCorp), family office of entrepreneur Victor Sassoon, and other notable corporates, family offices and high net worth individuals across Asia, Europe and the US. CIMB Niaga, a leading bank in Indonesia, became a strategic partner in Indonesia last year with a US$10 million commitment to Genesis to fund fast-growth tech companies in that country.

Dr. Jeremy Loh, Co-Founder and Managing Partner at Genesis Alternative Ventures, said: “We are delighted to welcome Capria as a strategic investor at a time where a liquidity gap exists for venture-backed companies looking to raise funds. In recent months, Genesis has seen a 30% increase in deal flows from high quality companies and founders. We are poised to make another five to six investments in the coming months which will double our portfolio size.”

Delivering Superior Returns and Scaled Impact

Capria specialises in investing in private funds and companies in underinvested emerging markets. These companies deliver essential goods and services to local consumers and small businesses leveraging technology and business model innovation in sectors such as financial services, healthcare, ag/food, logistics, and education.

Dave Richards, Co-Founder and Managing Partner at Capria, said: “The idea of investing for superior financial returns coupled with sustainable impact is catching on in Southeast Asia and Capria is proud to partner with Genesis to further this wave.

“Until recently, ‘impact investing’ was very nascent and mostly associated with concessionary financial returns in Southeast Asia. This has started to change with more leading funds implementing impact strategies to tap into underinvested sectors and companies.”

As part of Capria’s investment, Genesis will also join Capria Network, the largest network of emerging market fund managers collaborating to deliver superior returns and scaled impact.

Genesis Team are Venture Debt Pioneers in Southeast Asia

Genesis was founded by Ben J Benjamin, Dr Jeremy Loh and Martin Tang in 2019 to help tech enabled companies accelerate their growth while minimising equity dilution. Dr Loh and Mr Tang have extensive experience in venture lending and equity investing, having spearheaded DBS Venture Growth Partners specialising in venture lending

from 2015 to 2018. Dr Loh also helmed the EDB Investment office in Silicon Valley from 2009 to 2014. Mr Benjamin is also non-executive director of OurCrowd Singapore, the Israel-based online venture capital platform.

Since inception, Genesis has built a high-quality portfolio of diversified and resilient investments including Horangi, GoWork, Hmlet, Matterport and Lynk Global, co- investing alongside leading global and regional venture capital firms.

Significant Venture Debt Opportunity across Southeast Asia

Venture debt has accelerated across Southeast Asia in recent years given the maturing of the tech and financing ecosystem. Global data suggests there is significant headroom for growth in the region. A recent study by Kruze Consulting shows that US venture debt grew 30% in 2019, accounting for 10% of total venture capital investments. By comparison, venture debt makes up between 1% and 3% of overall venture funding in Southeast Asia last year.

With its young, mobile-first population, Southeast Asia is poised to be one of the biggest beneficiaries of high growth companies delivering access to digital products and services following in the footsteps of breakout companies such as Gojek, Grab, Lazada, Property Guru, Razer, SEA, etc.

Prudent Investing in times of Crisis

The data shows that financial crises have historically proven to be a time of innovation and entrepreneurship. Over half of Fortune 500 companies were created during a recession or bear market, and over 50 of today’s tech unicorns, collectively valued at $145.2 billion, were founded during the 2007-2009 recession years, including WhatsApp, Uber, Slack, Square, Alibaba & JD.Com1. In Southeast Asia, many tech enabled companies such as Kopi Kenangan, NinjaVan, Nium, Tanihub, have continued to raise funds successfully in the first half of 2020, Covid-19 notwithstanding.

Ben J Benjamin, Co-Founder and Partner of Genesis Alternative Ventures, said: “Major crises lead to a whole range of challenges but they also create investment opportunities. Fleet-footed entrepreneurs are able to tap these opportunities to create meaningful products and services to be accessible during turbulent times.

“These entrepreneurs have found their Zoom moments and we want to be there to take them to the next stage of growth.”

– The End –

About Genesis Alternative Ventures

Genesis Alternative Ventures is Southeast Asia’s leading private lender to venture and growth stage companies funded by tier-one VCs. Genesis is founded by a team of venture lending pioneers who have backed some of Southeast Asia’s best loved companies. Armed with a strong reputation among entrepreneurs and investors, Genesis is your trusted partner in empowering your company’s growth while minimising shareholders’ equity dilution.

About Capria

Capria Ventures is a global investment firm leading, partnering with and funding the largest network of emerging market fund managers collaborating to deliver superior returns and scaled impact. Capria brings venture capital innovation and global best practices to local venture capital, private equity and innovative debt funds, managed by local investment experts. Capria’s network of investing partners collectively manage more than USD $400 million in assets deployed in early stage and early growth companies in Latin America, Africa, and Asia. Capria has over $100M in AUM which it invests directly in India via Unitus Ventures, and in other markets via partners of the Capria Fund which takes anchor GP and LP positions. Capria has offices in Seattle, Bangalore and Nairobi. More at: http://capria.vc

It’s been an interesting number of weeks going into a slow down circuit breaker mode. As the traffic ground to a near halt, I have been observing how the change in work and lifestyle impacts not just me and my family but also the Singaporean island state of 5+ million people and the consumer behavior. From the way we buy our food and grocery, to staying in touch with family and friends and taking time to become more environmentally conscious. Consumers are gravitating towards new behaviours that are shaping the new normal way of life.

How digital technology is helping us in the New Norm

In the workplace and school, digital technology has undoubtedly helped many to continue with work and learning. My 11 year old gets up at 7, takes her breakfast, scans her temperature and does her PE workout before going into a Zoom class. Her art classes are now carried out over video conferencing. Amazing.

Traditionally, Singapore has thrived on offline businesses like hawker centres and wet markets where the locals go to get their fill of world-famous delights and also buy fresh produce. It’s been a way of life for many decades but these businesses have suffered a massive decline as people avoid venturing outdoors. The initial options for hawkers were food delivery platforms but the commission fees quickly make it untenable just to break even. A quick thinking young hawker came up with an idea to leverage the Facebook Community and established Hawkers United that would help market, take orders and also give unsavvy hawkers delivery options to get their food to hungry consumers. The digitalization of hawker business now meant that hungry Singaporeans can now satisfy their craving for chicken rice, prata and fried oyster. Similarly, Pasar United is an extension that now helps grocery and wet market vendors to digitize their offering. We started seeing produce like seafood, fruits and vegetables online too. The news headline shouts out: “From wet markets to web markets”.

Environmentally conscious consumer behavior

The lure of Singapore’s hawker centre is beyond just good food, but also that recognizable grey haired chef behind the wok. When I mask up and head out to buy food from my neighborhood hawkers, I noticed more people adopt environmentally friendly use of bringing their own container to reduce disposable packaging. With the surge in food ordering, there was a momentary shortage of disposable food containers. The BYO concept is definitely a great move for the environment and more importantly, the food tastes much better in a glass container.

However, cash transactions are still the preferred mode of payment for these offline businesses. Singapore has undergone an infrastructure upgrade to equip these businesses with the means to take cashless payment via QR code. Beyond making it more accessible and affordable for digital payment, there needs to be a significant cultural shift for consumers and business owners to adopt cashless means of payment. Our physical wallet needs to be replaced by our digital wallet, and in this current pandemic, not handling cash could also mean reduced infection risk.

Digital to non-digital

Not every part of our lives needs digital and what I am hoping to see revived is drive-in cinemas that were popular in the 70s and 80s. With movie theatres shut, perhaps we can huddle safely inside the comfort of our own enclosed space out under the moonlight to enjoy a movie screening. Nonetheless, I see our new normal way of life changing bit by bit and reshaped to accommodate what the world needs to evolve into going forward.

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US-based global impact investment firm Capria Ventures has invested in Genesis Alternative Ventures Fund 1, a Singapore-based private venture debt fund, as a springboard into South-east Asia (SEA).

Full Business Times article (11 June 2020)

Genesis Alternative Ventures, a private lender backed by Singapore-based family office Sassoon Investment Corp, is set to raise $50-$70 million by early 2021 for its first debt fund to finance Southeast Asian start-ups, its top executives said.

Full Reuters article (11 June 2020)

Genesis Alternative Ventures, a private venture debt fund in Singapore, has secured an undisclosed amount of investment from American global investment fund Capria, as it looks to double down on investing in impact-focussed startups.

Full e27 article (11 June 2020)

Loh said that since the coronavirus outbreak, Genesis had seen a big rise in enquiries, both from companies that traditionally raise equity and others seeking venture debt as additional financing.

Full Yahoo Finance article (11 June 2020)

The firm, founded in 2018, has invested in a significant and diverse number of startups to date, including cybersecurity company Horangi, coworking space GoWork, co-living startup Hmlet, cloud-based platform Matterport, and mobile connectivity company Lynk Global.

Full Singapore Business Review article (11 June 2020)

Genesis was established last year by Jeremy Loh and Martin Tang, both formerly of the venture debt unit at DBS Bank, and Ben Benjamin, an angel investor and non-executive director at OurCrowd Singapore

Full AVCJ article (11 June 2020)

Full Alpha Maven – Hedge Maven article (11 June 2020)

Full The Star article (11 June 2020)

Benjamin, who set up Genesis in 2019 along with bankers Jeremy Loh and Martin Tang, said the firm expects to nearly treble its portfolio to about 15 companies in about a year as start-ups see the benefits of lower financing costs and smaller equity dilution.

Full Nasdaq article (11 June 2020)

US-based global impact investment firm Capria Ventures has invested in Genesis Alternative Ventures Fund 1, a Singapore-based private venture debt fund, as a springboard into South-east Asia (SEA). This is Capria’s first investment in the region, where it sees plenty of opportunities to make an impact on societies through its investments.

Full SGSME.SG article (11 June 2020)

One of the reasons Genesis captured Capria’s attention was the fund’s ability to generate returns in a shorter time frame than venture equity funds, which typically take up to 10 years to reap potential profits. “That is actually quite attractive to a lot of investors who want yield and significant upside,” Mr Richards said.

Full KrAsia article (11 June 2020)

Genesis has now secured Capria Ventures, an IFC and Vulcan Capital-backed US investor, as an LP in its maiden fund. The investment marks Capria’s first investment in Southeast Asia and its first venture-debt fund investment globally.

Full Deal Street Asia article (11 June 2020)

Full Intellasia East Asia News article (12 June 2020)

Genesis plans to leverage on Capria’s expertise in impact investing to fund companies that have meaningful objectives such as financial inclusion, sustainability, small business digitisation, and gender diversity as it accelerates its growth across Southeast Asia

Full Singapore Business Review article (12 June 2020)

Genesis Alternative Ventures Fund I backs growth-stage companies with impact objectives such as financial inclusion, sustainable food production, small business digitisation and gender diversity, that are looking to scale across Southeast Asia.

Full Citywire article (12 June 2020)

Full AEC News Today article (12 June 2020)

Genesis now plans to hold on to Capria’s expertise in impact investing to fund companies that have meaningful goals such as financial inclusion, sustainability, small business digitisation, and gender diversity as it expands itself across Southeast Asia.

Full Investocracy article (13 June 2020)

Genesis Alternative Ventures on debunking venture debt myths and finding winners in SEA. They also share tips on how to identify “impact washers” — companies who claimed to have a sustainable social impact in their operations.

Full e27 article (18 June 2020)

Singapore-based Genesis is targeting $70m for its debut vehicle and already collecting commitments from international foundations and LPs.

Full Venture Capital Journal article (17 June 2020)

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Genesis Alternative Ventures Co-founder Jeremy Loh joined the other three distinguished speakers from the Venture Capital industry to deliver lots of insights and advice for the students of Singapore Management University.

Jeremy spoke about the beginning of his Venture Capital career as it straddled both the technological and the financial aspects of venture creation.

He went through some research and process of a business plan to raise funds and realised if we cannot commercialise and turn the idea into business; we were only half successful.

As a venture capitalist, Jeremy seeks motivated individuals who want to risk everything to commercialise an idea. Ideas can be pivoted along the journey, it’s much harder to change a person who doesn’t start off the right mindset.

And after experiencing the unique situation of COVID-19, some opportunities will be driven by the wider adoption of existing habits and combined with technology to win in the #NewNormal.

Read the full article here:

https://iie.smu.edu.sg/GHE_AMA

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Will Venture Debt Be a White Knight for Startups in Southeast Asia?

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The Latest News and Update from Our Portfolios

Venture Debt Opportunities in Southeast Asia

#GENZOOMS 3: Working, Living & Shopping: What it will look like with COVID-19

#GENZOOMS Episode 2: Secrets of resilient startups that raised funds during COVID-19

Global Investor Capria Fund invests in Singapore’s Genesis Alternative Ventures