BlackSoil crosses $300 mn in venture debt deals, predicts robust market

Company that provides debt capital says its assets under management have grown 55% YoY

BlackSoil, which provides debt capital, said on Thursday it has crossed $300 million in venture deals that help more than 100 companies to build their business.

BlackSoil said it invested $40 million in more than six deals in Q1FY23, posting the highest ever year-on-year (YoY) growth despite broader cyclical volatility and the impact of Covid-19.

“We invested in 2 unicorns in this quarter itself. Our AUM [assets under management] has grown 55% Y-o-Y. Besides, growth across portfolio companies has resulted in 7 successful complete exits during the quarter, as a testament to our underwriting quality. Our investee companies have raised $7 billion via equity since inception including $1.5 billion in FY22 itself,” the company said in a press release.

With a bearish trend in capital markets, cash has been in short supply for startups. Equity investors are operating with caution as the pace of deals and successful exits slow down. As start-ups seek capital and investors consider safer avenues, venture debt providers are quickly emerging as the preferred partners for both these groups. In 2022, many late-stage startups are witnessed partnering with debt capital providers.

“We continue to remain bullish on Venture Debt as the ideal alternative to equity in the current market scenario. Hence, market positioning, robustness of the underlying business model, cash conservative nature of businesses, positive unit metrics and longer runways are some of the key metrics we are currently evaluating before we are taking a bet, irrespective of the sector they operate in,” said Ankur Bansal, co-founder and director of BlackSoil.

BlackSoil manages an alternative credit platform comprising an RBI-registered NBFC as well as a SEBI-registered alternative investment fund / fund. Through multiple platforms, it has built a loan book by deploying $300 million across 130 deals and having an AUM of over $100 million.

Some of BlackSoil’s investments include nine unicorns--Upstox, Slice, Mobikwik, Udaan, Infra.Market, Zetwerk, OYO Rooms, Spinny and Purplle--along with other prominent companies such as leading cloud kitchen company, and Curefoods, a pioneer in 'buy now, pay later'.