Delhi-based venture debt firm Stride Ventures has announced the first close of Stride Ventures India Fund II, securing commitments of INR 550 Cr out of its target corpus of INR 1,000 Cr, with an additional greenshoe option of INR 875 Cr.
Having received approval from Securities Exchange Board of India (SEBI) in June 2021, the venture debt firm has raised more than half of its targeted corpus of INR 1,000 Cr within two months since the announcement of the launch.
Stride Ventures was founded in 2019 by Ishpreet Gandhi. The fund managers Gandhi and Abhinav Suri are former bankers with long-standing corporate lending experience including lending to startups. They have previously worked in institutions such as Citi, ANZ, IDFC, Kotak Bank, and Yes Bank, holding senior positions across relationship management and credit.
In addition to family offices and institutional investors, the firm will diversify its investor base outside India for Stride Ventures India Fund II, on the lines of the maiden fund. Amid growing investor confidence and a maturing Indian startup ecosystem, the new fund represents a significant opportunity for the firm to build a robust pipeline of deployments in the coming months, it said in a statement.
The firm aims to ramp up deployment in late stage startups across sectors like B2B commerce, healthcare, agritech, fintech and D2C brands with average ticket size upto INR 75 Cr.
“The considerable tailwinds seen in the Indian start-up ecosystem present a perfect opportunity to invest in the potential of venture debt in India. With the majority of investors from our maiden fund returning to invest in the new fund, we have had a quicker-than-expected first close. Their confidence remains resolute in our mission to build innovative alternate financing solutions for founders to help scale their startups more efficiently,” said Ishpreet Gandhi, founder and managing partner, Stride Ventures.
Stride Ventures has made disbursals of over INR 400 Cr in 2021 across 20 investments. The firm remains on track to announce the final close of the second fund by the end of 2021, it said. With its ability to recycle capital, Stride will effectively have more than INR 3,000 Cr for funding startups across the tenure of the fund, it stated.
The Venture Debt Interest
Stride Ventures had closed its maiden fund earlier this year after overshooting its initial target corpus of INR 350 Cr ($48 Mn), of which INR 85 Cr ($11 Mn) was invested by state-run Small Industries Development Bank of India (SIDBI). It has funded more than 20 startups from Stride Ventures India Fund I, which includes Pocket Aces, Miko, SUGAR Cosmetics, Infra.market, Spinny, HomeLane, Zetwerk and Bizongo. The company claims that the first fund is on track to deliver its target internal rate of return (IRR) of 18-19%, notwithstanding the economic disruption due to COVID-19.
According to Inc42 analysis, Indian startup ecosystem is home to approximately 119 unique investors who participate in debt funding rounds, but there are only a handful of pureplay venture debt firms including but not limited to Trifecta Capital, Alteria Capital, Innoven Capital, Blacksoil and Stride Ventures. On July 27, Trifecta Capital announced the first close of its late-stage venture capital Fund – Trifecta Leaders Fund – I, with commitments of over INR 1,000 Cr ($130 Mn). The fund was launched 3 months ago and has a target corpus of INR 1,500 Cr ($200 Mn).