Varanium Capital, a leading global asset management firm, has successfully completed the first close of its inaugural venture debt fund which is valued at Rs 250 crore.

Aparajit Bhandarkar, VC Partner at Varanium Capital, in an interview with CNBC-TV18, stated that the company plans to start deploying funds within the next two-three weeks. While being sector-agnostic, the firm has expressed a particular interest in investing in various sectors, including D2C (Direct-to-Consumer), SaaS (Software-as-a-Service), B2B (Business-to-Business), and fintech.

Highlighting the potential for debt funding in India's startup ecosystem, Bhandarkar stated, "There is a lot of headroom for India to do more debt funding for startups."

Comparing the figures to the United States, where venture debt contributes around 15 percent of venture capital funding, Bhandarkar pointed out that in India, this number stands at only three percent. This disparity reveals a significant opportunity for growth and development in the Indian startup financing landscape.

As of now, Varanium Capital is overseeing nearly $1 billion of assets across structured debt, portfolio management services, and venture capital funds.

KS Sridhar, an Advisory Board Member at Varanium Capital and former CRO (Chief Risk Officer) of IndusInd Bank, shed light on the firm's approach to credit underwriting.

"The company will be using a whole host of technology tools such as machine learning, algorithmic-based credit scoring etc, which will enable us to do faster credit underwriting with lesser human involvement as well," Sridhar said.

The seven-year-old company also plans to provide funding through a mix of revenue-based financing and traditional venture debt to up to 100 early-stage to-growth startups in India.

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Watch the video for the entire conversation.

First Published:Jul 4, 2023 10:49 PM IST