Viola closes its largest credit fund with $700m

Vehicle hits its target and will provide asset-based lending to companies disrupting traditional financial markets.

Viola Credit held a final close of its Viola Credit Alternative Lending Income Fund II with $700 million of investable capital, including its flagship fund and related managed accounts. The fund, which was raised over the past 12 months, hit its target, Ido Vigdor, general partner at Viola Credit, told Private Debt Investor.

Like its predecessor, Alternative Lending I, the latest fund will provide “minimally dilutive” asset-based lending to emerging and established companies that are disrupting the traditional financial markets, according to a news release. The markets include fintech, proptech and insuretech companies located in the US, Western Europe, the UK, Australia and New Zealand. The Viola fund is financing the underlying receivables of these firms, Vigdor said.

Viola said the fund has already called more than 40 percent of its capital and plans to partner with 13-15 more fintech platforms. Viola didn’t disclose additional details, although Vigdor noted that the fund doesn’t use leverage. The predecessor fund closed in 2018 on $190 million, according to PDI R&A. Viola has “deployed over $1.1 billion to date under this strategy,” and has partnered with more than 15 platforms, Ruthi Furman, founder and general partner of Viola Credit, said in the statement.

“There’s a huge disruption happening around fintech, irrespective of the Nasdaq’s recent decline,” Vigdor said. “Our job is to work with the best-in-class companies,” he said. Vigdor noted that the fintech market in general and in Israel, which is noted for its technology development, is growing by double digits year over year, and he expects that to continue.

Global fintech funding reached a record $132 billion in 2021, with fintech lenders originating more than $120 billion of loans.

“This fintech revolution, driven by acceleration of digital adoption and emergence of new business models, enables new forms of banking experience and consumer financial services,” Vigdor said in the statement. That requires lending capital solutions from outfits like Viola to support growth, he said.

Viola Credit is a global investment manager focused on “the growth of the innovation economy”. It is part of Viola Group, one of Israel’s largest technology investors with more than $4 billion of assets under management.