[Funding alert] Caspian Debt gets $20M investment from DFC

The new facility will help Caspian Debt to provide access to collateral-free debt funding to underserved entrepreneurial ventures and social enterprises.

Corporate lender Caspian Debt on Friday said it has raised $20 million in long-term debt funding from the US International Development Finance Corporation.

The new loan - a combination of subordinated and senior debt - will help Caspian Debt provide customised and collateral-free loans, digitally, to enterprises operating in high impact sectors in the country, the company said.

These include microfinance, SME finance, housing, healthcare, sustainable agri-business and education.

Caspian Debt has lent over $219 million to over 140 early-stage enterprises over the last seven years, across both tech-driven, and brick and mortar businesses, in sectors including agri-business, cleantech, education and employability, healthcare, small business lending and essential delivery companies.

S. Viswanatha Prasad, Founder and Managing Director of Caspian Debt said the company will use the funding to focus on "promoting disruptive entrepreneurs, who are pushing the envelope for creating sustainable impact."

"This vote of trust from DFC is even more valuable at a time when the whole world, especially the small and medium companies, are dealing with the economic aftermath of a global pandemic," he added.

The company will also use the loan to contribute 33 percent of its investments to women-centric businesses, as part of its commitment to DFC's 2x Women's Initiative, which has catalysed over $2 billion of private sector investment in business and funds owned by, led by, or providing a product or service that empowers women.

Commenting on the financing, Anthony Randazzo, CFA Investment Director at DFC, said:

“Small businesses are the engine of growth and job creation in India, and high impact businesses are the vehicle for achieving a more responsible, sustainable and equitable economic future. This loan is an expression of confidence we place in the important work that Caspian Debt does, and demonstrates our long-term commitment, particularly in these uncertain times.

DFC invests in sectors such as energy, healthcare, critical infrastructure, and technology, among others, and provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets.

Promoted by Caspian Advisors, Caspian Debt primarily works with first generation social entrepreneurs, who find it difficult to raise working capital. It offers custom debt solutions such as term loans, revolving facilities, invoice or order financing, quasi-equity and venture debt to professionally managed small or mid-market companies and startups.

Edited by Aparajita Saxena