Genesis launches South-East Asia venture debt fund

Singapore-based lender's five-year vehicle is targeting a gross IRR of 12-25%, with equity upside.

Genesis Alternative Ventures, a Singapore-based venture lender, launched its first third-party capital venture debt fund in May to target venture capital-backed companies across South-East Asia.

The launch came amid an increasing funding gap in the emerging venture capital financing ecosystem across Asia as well as increasing demand from private investors looking at debt investing as a ‘venture tie-up’.

The vehicle has a three-year investment period within a five-year fund life. It will provide institutions with the opportunity to invest in a portfolio of loans to businesses with more than $1 million in revenue.

“The sweet spot [for us] is companies in their Series B phase, though we will invest in attractive companies that are seeking Series A funding,” Jeremy Loh, co-founder and managing partner at Genesis, told Private Debt Investor.

The firm expects to offer loans, ranging from $1 million to $3 million, to venture capital-backed companies that have proved their business models. The fund will aim to deliver gross returns of between 12 and 25 percent, including equity options.

Genesis was founded in 2018 by Jeremy Loh, Ben Benjamin and Martin Tang as the first independent venture lender focusing on South-East Asia. Both Loh and Tang previously worked at DBS Bank as a senior vice-president and a vice-president, respectively. Benjamin is also a co-founder and non-executive director of Sechel Asia and was director of corporate strategy at FJ Benjamin Holdings.

Loh said the firm’s venture debt offering would typically be senior secured non-convertible debentures with equity options. He added that in South-East Asia, traditional lenders, such as banks, have typically avoided this type of financing because of a lack of understanding of how these fast-growth start-ups operate.

Genesis’s disclosures as of 26 June showed the firm had invested in three companies, including Singapore-based Horangi Cyber Security and Indonesian workspace provider GoWork.

According to a Business Times report, Genesis raised an undisclosed amount of capital from Sassoon Investment Corporation, the family office of the Sassoon family, and was looking to raise $70 million as of May.