Varanium Capital Closes €250 Million Debt Fund to Support Startups

• ByStartupStory     |    July 4, 2023

The asset management company Varanium Capital announced on Tuesday the closing of its first debt fund of 250 million euros. The fund invests in approximately 100 startups using a combination of income-based financing and traditional equity loans. The fund has secured an anchor investor and commitments from family offices, high net worth individuals (UHNI) and entrepreneurs, including former bank CEOs and CXOs. 

The debt fund will be managed by Nawal Bachhuka, director of Varanium Capital and former IndusInd Bank management, including ex-CEO Romesh Sobti, ex-CRO KS Sridhar, ex-Head of Corporate Loans Suhail Chander and ex-CEO Paul Abraham. The investment committee includes Varanium Group founder TS Anantakrishnan, venture capital partner Aparajit Bhandarkar, Suhail Chander and KS Sridhar.

“Venture debt fund will provide financial backing to startups in sectors such as D2C (Direct-to-consumer), SaaS (Software as a Service), B2B commerce, and fintech who require to scale their operations,” said TS Anantakrishnan, Founder, Varanium Capital in a statement.

He said the fund also has a range of green shoes worth Rs 50 crore where the green shoe option allows investment funds to raise capital outside the original target group to support the fund based on interest rates set by investors. Varanium efficiently manages approximately $1 billion in assets across all asset classes, including structured debt, portfolio management services (PMS) and venture capital.

Varanium Capital’s fintech-focused equity fund has backed 12 startups, including Easebuzz, Riskcovry, Finvu and Homeville. The closure comes amid a growing financial winter in the startup system, and as investors and startups increasingly seek alternative channels for capital flow. Stride Ventures, Innoven Capital, Alteria Capital and Trifecta Capital are some of the private equity funds in India.

According to India Venture Debt Report 2023 by Stride Ventures, $800 million in venture debt was issued in India in 2022 to 120-130 companies in 170-180 deals. By comparison, in 2021, $538 million in equity loans were paid out to startups.

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