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Nearly 40% of Start-Up Founders Focus on Debt Financing at Pre-IPO Level

OutlookIndia

OutlookIndia · 4m ago

Nearly 40% of Start-Up Founders Focus on Debt Financing at Pre-IPO Level

Nearly 40% of start-up founders are turning to debt financing at the pre-IPO level, with around 49% of venture debt occurring in series B and beyond. This trend, as highlighted in a Stride Ventures and Kearney report, emphasizes debt's growing role in pre-IPO bridge financing. Debt financing allows businesses to scale efficiently before going public, providing more stable returns for investors. This approach helps avoid dilution, making IPOs potentially more lucrative and protective for investors.

Related News

LetsVenture Floats Debt Financing Marketplace For Startups

Inc42 · 12m ago

LetsVenture Floats Debt Financing Marketplace For Startups

LetsVenture has introduced LV Debt, an online marketplace aimed at supporting startup founders by providing tailored debt financing options. The platform will offer a range of financing solutions, including working capital loans, revenue-based financing, supply chain financing, and venture debt, in order to meet the specific needs of startup companies. The marketplace is designed to educate and empower founders in making informed financing decisions for their businesses.

Supply chain start-up QuiD raises ₹5 crore

Thehindubusinessline

Thehindubusinessline · 1y ago

Supply chain start-up QuiD raises ₹5 crore

QuiD, a Bengaluru-based supply chain fintech start-up, has raised ₹5 crore in pre-seed funding. The funding round was led by Mint Cap Enterprises and Stone Park Capital, with participation from angel investors including Sushant Kumar of Omidyar Network. The funds will be used to enhance technology capabilities and strengthen relationships with existing clients and partner lenders. QuiD aims to leverage technology, data science, and blockchain to improve access to credit for the anchor and retailer community at the invoice level. Supply chain financing is a market estimated to be around ₹20-lakh crore according to an RBI report.

Kalpataru IPO sees muted response on Day 1. Check subscription, GMP and other details

Economic Times

Economic Times · 2m ago

Kalpataru IPO sees muted response on Day 1. Check subscription, GMP and other details

Kalpataru's IPO showed a lackluster start with only 9% overall subscription on its first day. Retail investors accounted for a 33% subscription, while institutional investors did not participate. Priced between Rs 387 and Rs 414, the Rs 1,590 crore IPO aims to repay a significant portion of company debt. Analysts raised concerns about high valuations and debt, assigning a "NEUTRAL" rating, citing the need for sustained pre-sales performance post-listing.

VC Push for Asset Financing, Venture Debt to Fund Deeptech Start-ups

OutlookIndia

OutlookIndia · 8m ago

VC Push for Asset Financing, Venture Debt to Fund Deeptech Start-ups

The article discusses how venture capitalists are advising deeptech start-ups in India to explore alternative funding options such as asset financing and venture debt. The deeptech sector in India has seen substantial growth, with the number of start-ups expected to increase from 3,600 to nearly 10,000 by 2030. Traditional funding options may not be suitable for deeptech start-ups due to the longer development and commercialization timelines. Investors suggest that different funding options can help bridge the gap and support the growth of deeptech start-ups.

New high tech incubators to get millions in funding - The Economic Times

Economic Times

Economic Times · 1m ago

New high tech incubators to get millions in funding - The Economic Times

The Israel Innovation Authority (IIA) has launched a program to establish high-tech incubators with investments of up to 40 million Shekels (USD 11.9 million) each. These incubators will focus on Deep-Tech fields such as semiconductors, bio-convergence, and robotics, which face high risks and lack specialized investors in Israel. Additionally, the Authority will offer non-dilutive investments totaling approximately 100 million Shekels (USD 29 million) to support startups from Pre-Seed to Round A financing.

Moving beyond equity! How startups shift to debt financing fuel business growth?

Livemint

Livemint · 1y ago

Moving beyond equity! How startups shift to debt financing fuel business growth?

Startups are increasingly turning to debt financing as an alternative to equity fundraising in order to secure the necessary funding for growth. Debt financing allows founders to retain control and minimize tax outgo, while also offering fixed interest rates and flexible repayment schedules. However, debt funds come with risks such as financial strain and impact on creditworthiness if repayments are not made in a timely manner. Startups should carefully assess their risk tolerance and cashflow projections to strike a balance between debt and equity financing. Various types of debt financing options, including bank loans, term loans, collateral loans, and vendor financing, are available for startups. Debt financing has become a reliable source of funding for startups during times of limited equity investments.

Venture debt options for start-ups on the rise

Money Control

Money Control · 1y ago

Venture debt options for start-ups on the rise

Here's some promising news for start-ups in search of debt financing without the need for collateral or early equity dilution. Despite government efforts to encourage collateral-free loans for start-ups and MSMEs, such initiatives have not gained traction. Entrepreneurs are frequently advised that equity capital is costly, as it often entails relinquishing substantial ownership in their firms to venture capitalists. This early dilution can lead to lower long-term returns on their ventures. Debt financing, often considered a more cost-effective alternative, is, however, seldom accessible to start-ups.

IPO-bound Ola Electric raises $50 Mn debt from EvolutionX

Entrackr

Entrackr · 1y ago

IPO-bound Ola Electric raises $50 Mn debt from EvolutionX

Ola Electric has raised Rs 410 crore (approximately $50 million) via non-convertible debentures from EvolutionX. The board at Ola Electric has passed a resolution to issue 41,000 NCD (non-convertible debentures) at an issue price of Rs 100,000 each to raise Rs 410 crore, its regulatory filing sourced from RoC shows. This is the second debt financing for Ola Electric in the last six months. In October 2023, it received $385 million in a funding round mix of equity and debt from Temasek-led marquee investors and the State Bank of India (SBI). According to startup data intelligence platform TheKredible, the firm has raised more than $1 billion across equity and debt and was valued at $5.4 million during the last round. ET reported the development first. Ola Electric has been working on its lithium-ion cell manufacturing facility with an initial capacity of 5 gigawatt hours in phase I which will be further scaled up in phases to 100 gigawatt hours at full capacity. Besides focusing on electric scooters, the firm has also introduced its motorcycle line-up scheduled to be launched by the end of this year. In December 2023, Ola Electric filed its draft red herring prospectus (DRHP) with the Security Exchange Board of India (SEBI) for an initial public offering (IPO) to raise Rs 5,500 crore ($660 million). As per the company, it will utilize the primary proceeds for the expansion of the capacity of its cell manufacturing plant, repayment or pre-payment of the indebtedness, investment into research and product development, and general corporate purposes. Ola Electric is the second IPO-bound company that raised debt financing in recent times. Last week, fintech firm MobiKwik raised Rs 50 crore ($6 million) in debt from BlackSoil Capital. Entrackr exclusively reported the development. Temasek-backed EvolutionX has backed notable companies like Udaan, Mensa Brands, PharmEasy and LendingKart.

ixigo Sets IPO Price Band At INR 88-93, Aims To Raise INR 740 Cr

Inc42 · 1y ago

ixigo Sets IPO Price Band At INR 88-93, Aims To Raise INR 740 Cr

ixigo, a tech start-up, is planning an Initial Public Offering (IPO) that includes a fresh issue of shares worth INR 120 crore and an offer for sale component of 6.67 crore shares worth INR 620 crore. The company aims to become the fourth new-age tech start-up to have a mainboard IPO in 2024, following Awfis, Go Digit, and TBO Tek. ixigo's strengths lie in its focus on railway ticketing and its targeting of Tier II and smaller markets, which bode well for its IPO.

Krafton-backed Loco fires 40 employees

Inc42 · 1y ago

Krafton-backed Loco fires 40 employees

Game streaming platform Loco, backed by Krafton, has announced the layoff of around 36% of its workforce, constituting about 40 employees. The founders mentioned this as part of the company's restructuring plan while expressing their intentions to expand globally. Loco aims to focus on transaction-based monetization and core objectives in order to streamline operations and attain a leaner cost structure. The Mumbai-based start-up raised $42 million in its Series A funding round last year. India has a significant gamer base of 568 million, with 25% being paying users.

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