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Inc42

Inc42

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How Venture Debt Is Reshaping Early Stage Funding In India

Venture debt has become a popular financing option for startups in India, providing a complementary pathway to venture equity funding. Startups are using venture debt to extend their runway, meet milestones, and negotiate better equity outcomes. The demand for venture debt has seen a remarkable 80% year-on-year surge in the first half of 2023. It is no longer limited to distressed startups but is being utilized by well-performing companies for efficient growth. Venture debt serves as a bridge for companies transitioning to a stage where bank financing becomes viable and instils financial discipline in startups. As venture debt gains acceptance and integration into financial strategies, it is expected to play a significant role in India's startup success stories.

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