SUMMARY
The SEBI-registered Category-II AIF has raised INR 155.4 Cr as part of the first close
The funds will be deployed in the next two years across 35-40 Indian startups
Lighthouse Canton said it would invest in startups across sectors, specifically in growth stage startups
Singapore-based global investment firm Lighthouse Canton has marked the first close of its INR 550 Cr India-focused venture debt fund.
The fund, which is a Securities and Exchange Board of India (SEBI)-registered Category-II alternative investment fund (AIF), has raised INR 155.4 Cr as part of the first close.
The investment firm plans to deploy the capital in the next two years across 35-40 startups.
Speaking to Inc42, Lighthouse Canton’s Global Head of Asset Management Sanket Sinha said that the fund saw participation from onshore and offshore institutions, family offices and other ultra-high-net-worth individuals (UHNIs). The fund would largely extend debt capital to Indian technology-enabled startups with ‘sound business models and viable unit economics’.
Sinha added that the fund would be ‘sector-agnostic’ and would largely invest in growth-stage companies across Series B and Series C rounds.
“In more mature venture ecosystems such as the US and Europe, venture debt has risen to 15-20% of the total VC funding, whereas this proportion is less than 2% in India. Given the growth of the venture ecosystem in India, we see tremendous opportunity for venture debt, and we expect the size of this market to grow 3-4X in the next five years,” added Sinha.
The venture debt fund plans to earmark a capital of INR 5 Cr to INR 15 Cr for each transaction, but is also open to writing cheques for lower amounts for prospective investments.
Chiming in, Ankit Agrawal, Lighthouse Canton’s director for venture debt, said, “Given that our venture debt strategy is regional, we can also support a startup with aspirations to expand out of the domestic market. Our presence in other markets uniquely positions us to partner with companies with international expansion plans and help them with their financing needs.”
The first close of the fund comes close on the heels of Lighthouse Canton partnering with Nueva Capital to launch another venture capital fund which focused on pre-Series A and Series A Indian startups.
Lighthouse Canton is a Singapore-based asset and wealth management firm that caters to corporates, UHNIs, founders and entrepreneurs with their personal and business investment needs and other tailored products.
The company made its wealth management foray into India in 2020 while its India-focused venture debt vertical was unveiled in 2022. Lighthouse Canton also offers solutions ranging from funding solutions for startups to closely working with the founders on business structuring.
Over the last few years, and especially amidst the funding winter, Indian startups have embraced the venture debt funding route. The funding raised by Indian startups declined 40% to $25 Bn in 2022, down from $42 Bn in 2021.
