New OurCrowd Product: Venture Debt
Regular returns and shorter terms with Genesis II Venture Debt Fund
- Private venture debt fund in Southeast Asia with deep regional experience, enabling it to secure attractive deals at competitive terms, focusing on fast-growing, lucrative startups in the region
- Unique opportunity to invest in venture debt fund: regular quarterly distributions on interest earned, additional potential upside through warrants and equity kickers, 6-year tenure - shorter than standard equity VC fund
- Strong track record: 24.6% gross IRR, 19% DPI on 2019 vintage Fund I
- Portfolio of high-growth technology companies backed by top-tier VCs
- Experienced venture debt team backed by institutional LPs
- OurCrowd's new venture team led by Or Alon, ex-Silicon Valley Bank
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with your Investor Relations representative
Dear Josb,
OurCrowd is offering investors a new product: Venture Debt. This is a unique opportunity to invest in startups for a shorter term and with reduced risk than a regular equity investment. Investors benefit from regular quarterly distributions on interest and fees earned, with additional potential upside through the sale of warrants. As with most OurCrowd opportunities, the startups are backed by top-tier VC investors.
OurCrowd is investing in Genesis Alternative Ventures II L.P., a Singapore-based venture debt fund that will provide growth capital to fast-growing, venture-backed tech companies based in Southeast Asia. The details in this email are based on information received from, and verified solely by, the fund.
Venture debt
Venture debt provides revenue-generating companies with an opportunity to raise additional capital, giving them additional runway, on a minimally dilutive basis. It is mainly used to extend the company's runway to maximize valuation in the next equity round. It is also used to provide an insurance buffer against working capital mismatch or operational cash requirements.
For investors, venture debt provides a shorter time horizon than equity with a different risk/reward calculus. Venture debt comes with considerable security to protect downside risk and regular and predictable returns from the debt and equity warrant options.
Market opportunity
Venture debt is estimated to equal 5-20% of total equity funding, depending on geography. Venture debt is growing strongly across Southeast Asia with an estimated 100-120 Southeast Asian companies already benefitting.
Low relative levels of venture debt available in Southeast Asia give Genesis an opportunity to secure high yielding interest income as a senior secured debt provider. The fund managers believe this unique combination provides the opportunity to generate equity-like returns with debt-like risk on a regular, quarterly basis.
Portfolio strategy
Genesis will provide debt financing to high-growth tech companies in Southeast Asia, primarily Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines. The portfolio will include 20-30 companies backed by top-tier VCs that have commercialized products and are generating revenue.
Track record
Halfway through its five-year term, Genesis' first fund is showing strong performance. To date, the fund's portfolio of high-growth companies backed by top-tier VCs has generated a gross IRR of 24.6% and a distribution to paid-in capital of 19%.
The team
Genesis has the most experienced venture debt team in Southeast Asia, led by Dr. Jeremy Loh, Managing Partner, who previously built DBS Bank's venture debt business for Southeast Asia. Genesis has a strong limited partner (LP) investor base. LPs in Genesis Fund I include Aozora Bank, Korea Development Bank (KDB), Mizuho Leasing and Bank CIMB Niaga as a strategic investor with Genesis in Indonesia.
OurCrowd's new venture debt team is led by Or Alon, formerly with Silicon Valley Bank.
The fund
Genesis is raising $120M-$180M for Genesis Alternative Ventures II L.P. The fund is expected to make regular quarterly distributions on interest and fees earned, with additional potential upside through the sale of accompanying warrants. The fund will have a six-year tenure, shorter than the 10-12 years typical for standard equity VC funds.
Meet the Fund Manager
We're hosting a webinar/conference call on Wednesday, June 8th, at 5PM Israel / 10AM New York / 7AM San Francisco for investors to meet Fund Manager Ben J Benjamin and learn more about Genesis.
Can't make the webinar? Register and we will send you a recording of the call.
Next steps:
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