Stride Ventures gears up to take a bigger bite of the venture debt space

India’s venture debt space has been buzzing, with sectors such as healthcare, agritech and D2C seeing huge traction. Delhi-based venture debt fund Stride Ventures, which recently announced the first close of its Fund II at Rs 550 crore, hopes to mark the fund’s final close by the end of the calendar year 2021.

“Overall ecosystem movement in the past three to six months have been quite heartening. The founders are getting more privy on the venture lending requirements and how it can preserve the dilution,” says Ishpreet Singh Gandhi, Founder and Managing Partner at Stride Ventures. Lending itself in India is very underpenetrated, he adds. 

Stride Ventures strategy for debt deployment is structured on two parameters – the first being meeting funding requirements for working capital to fuel a company’s growth. Acquisitions and consolidations are secondary scenarios where Stride Ventures see deployment opportunities since they believe debt requirements will increase because of the sheer nature of these companies. 

Speaking about mid- and late-stage companies, Gandhi says, “We forecast an average of $8-10 million fund requirements across these companies.”

The venture lending fund has invested in over 30 companies, including Pocket Aces, HomeLane, Bizongo, Sugar Cosmetics, etc. The Direct to Consumer (D2C) story in India has played out well, according to Gandhi and Stride Ventures has been actively investing in this space.

In the case of B2B marketplaces, the firm believes in deploying funds to companies that have business receivables. They are considering both traditional and non-traditional companies in the B2B space. 

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The digital health sector has been of particular relevance to most investors since the COVID-19 pandemic struck in 2020. In a report published by Mercom Capital Group, it was found that the total corporate funding for Digital Health reached $21.6 billion in 2020. The funding is cumulative of Venture Capital, debt and public market financing. 

For Stride Ventures, too, healthtech startups have been one of the priorities since the pandemic with investments being deployed into Medikabazaar, DocsApp, MediBuddy, etc. The firm will be using the new fund as an opportunity to enable more deployments in the mid-stage and late-stage companies in the startup ecosystem.