Temasek Acquires SVB India Finance For $48.1M To Foray Into Venture Debt

TECHINASIA: Singapore’s sovereign wealth fund Temasek has acquired SVB India Finance, the largest provider of debt financing to VC-backed firms in India. The deal is worth INR 3 billion (US$ 48.1 million).

SVB India Finance was established by Nasdaq-listed SVB Financial Group as a wholly owned subsidiary headquartered in Mumbai. It gives loans to early stage and mid-growth companies in technology, consumer, healthcare, and cleantech space.

The seven-year-old firm claims of being the largest fund in its segment having provided over 75 loans to more than 50 companies including Snapdeal, Myntra, and Capillary Technologies. It will now leverage Temasek’s expertise, resources, and network to further strengthen its foothold in India and South Asia.

“The funding and support from Temasek will not only help us continue to remain the dominant player in venture debt business in India but also build a leading debt platform across key markets in Asia,” Ajay Hattangdi, CEO & managing director of SVB India Finance, said in a statement.

Post the acquisition, SVB India Finance has been renamed as InnoVen Capital India. It will be independently managed by Hattangdi while Temasek’s director of enterprise development group Aftab Mathur has joined the board of the company.

This is Temasek’s first step towards building a pan-Asian venture lending platform.

“Temasek is committed to this platform as part of a broader pan-Asian venture debt financing initiative. We believe that the platform will be attractive to the startup community in India – entrepreneurs, venture capitalists and angel investors – not just in the context of promoting the growth of innovative companies in India but also for their expansion as they seek to venture beyond India,” Ong Beng Teck, managing director – enterprise development group of Temasek, which owns a US$177 billion portfolio. As at March 31, 2014, India was around four percent of Temasek’s net portfolio value based on underlying assets.

According to InnoVen Capital India, venture debt in developed markets such as US and Europe is nearly eight to 10 percent of addressable VC investments. The Indian venture debt market is still at a nascent stage and is expected to cross US$1 billion on a cumulative basis in the next five to seven years.