BlackSoil Bags $25 Mn Funding As It Looks To Cash In On Venture Debt Boom

Mumbai-based venture debt firm BlackSoil has raised $25 Mn in funding from multiple banks, family offices, corporate treasuries, and high-net-worth individuals. The debt firm raised the capital through its various debt products. 

In a statement, the company said that 60% of the participants in the round were existing investors. 

This is in addition to another $35 Mn in funding that the debt firm raised in the first half of the financial year 2022-23 (FY23). With this, BlackSoil raised $60 Mn in the last financial year. 

“We have witnessed a strong interest from investors, and we are confident that our robust portfolio performance in the current funding winter environment will continue to attract investors in the years to come,” said BlackSoil cofounder Ankur Bansal.

The company attributed the high investor repeat rate to its focus on structuring opportunities in a risk-adjusted manner and investments in companies with sustainable growth. 

Founded in 2017, BlackSoil is a sector-agnostic alternative credit platform that claims to have $90 Mn worth of assets under management (AUM). The venture debt firm claims to have deployed more than $270 Mn worth of debt across 135 deals. BlackSoil has so far invested in nine unicorns. Some of these names include names such as Zetwerk, OYO, Spinny, Upstox, Udaan, and Blu Smart, among others. 

As per the company’s website, it has made gross disbursements to the tune of INR 1,875 Cr to date and has had 72 exits.

The debt funding firm last raised INR 250 Cr from family offices, UHNIs/HNIs and investment institutions back in October last year. 

BlackSoil’s fundraise comes at a time when a funding crunch has dogged the entire Indian startup ecosystem. With investors wary of investing capital and equity funding staying on the margins, more and more Indian startups are looking at alternative credit to fuel their growth story. 

The move to debt funding has also been led by concerns around heavy cash burn by Indian startups and no clear path to profitability. Meanwhile, VC and PE firms, of late, have also begun prioritising sustainable business models led by profitability and unit economics.

As a result, an increasing number of companies are looking at venture debt to raise funding. Last month, D2C Ayurvedic beauty and personal care brand The Ayurveda Co raised INR 100 Cr in a mix of debt and equity. Even edtech giant LEAD raised a mammoth INR 160 Cr debt funding from financial institutions and venture debt firms in January.

Another D2C silver jewellery brand GIVA also bagged INR 40 Cr worth of debt from Alteria Capital. Such has been the popularity of venture debt that even the state-backed Small Industries Development Bank of India (SIDBI) ventured into the space and executed four debt investments in the space. 

Even venture debt funds have not stayed behind. In January, global investment firm Lighthouse Canton marked the first close of its INR 550 Cr India-focused venture debt fund.