VentureSoul Partners Launches INR 600 Cr Maiden Debt Fund To Back New-Age Tech Startups

VentureSoul Partners has launched its maiden debt fund, VentureSoul Capital Fund I, with a target corpus of INR 600 Cr. The fund is a SEBI-registered Category II AIF and has so far received commitments from family offices, corporates, high-net-worth individuals and other eminent investors.

While Micro Labs Ltd. is the anchor investor for the fund, KreditBee founder Madhusudan Ekambaram, Glen Appliances Ltd, PSN Group, Baazar Kolkata promoter Abhishek Khemka, Pure Chemicals Group’s Ponnuswami M are the other notable investors.

The sector-agnostic fund will primarily focus on tech startups in diversified sectors, including fintech, B2C, B2B and SaaS companies. 

VentureSoul is eyeing the first close of the fund by the end of June. The fund will invest in startups that are at Series A or beyond stage, with a demonstrated revenue model and having raised at least $10 Mn of equity funding.

The fund will focus on delivering differentiated debt solutions to the new economy space. VentureSoul cofounder and managing partner Ashish Gala said that beyond the traditional debt model, there are not enough structured financing models available in the Indian tech startup ecosystem. 

“The fund looks to bring together the private credit world which focusses on the old economy and venture debt which focusses on the new economy. It aims to invest in around 20-25 companies in the first batch with an average ticket size of INR 25-30 Cr. The maximum amount will be capped INR 60 Cr,” he added.

VentureSoul Bets On The India Growth Story 

VentureSoul was founded by three ex-HSBC bankers – Gala, Anurag Tripathi, and Kunal Wadhwa, who bring together over 65 years of experience. Having had the experience of successfully building businesses ground up for various domestic and international organisations, the partners launched VentureSoul to create a value-based enterprise.

 According to VentureSoul founders, given the transition in the new economy from growth-at-all-costs to sustainable and disciplined growth, this is an opportune time for a debt-focused fund that brings prudent debt offering on the table.

 The founders see mergers and acquisitions and consolidation as a prominent theme playing out in the sector. Further, as the companies in the sector mature, there would be a need for debt solutions targeting a variety of additional end uses. 

Wadhwa said that the share of debt funding is currently as low as 3-5% in the Indian startup ecosystem. Besides, debt funding is also not properly leveraged in the overall economy. 

According to Inc42 data, pure debt funding accounted for approximately 4.3% (or $6.5 Bn) of the total $148.8 Bn funding raised by the Indian startups between 2014 and April 2024. Also, between 2021 and 2023, only 13 debt funds were announced with a total corpus of $1.5 Bn, which was just 4.4% of the around 270+ funds announced with a cumulative corpus of $33.72 Bn.

“We believe debt funding is going to take off in the hockey stick growth curve now and will play out well in the next decade of India, as the country aims to become a $25-35 Tn economy by 2047,” Wadhwa added.

 VentureSoul aims to differentiate itself by blending prudent banking principles with new-age credit evaluation technology, adopting a partnership approach towards its portfolio companies, and specialising in providing tailor-made solutions.

“The group intends to create a sustainable, scalable organisation that partners for growth capital and beyond. India is at an inflexion point, where it would need its experienced and skilled talent to come forward to push the juggernaut forward,” added Tripathi.