LetsVenture launches $100m debt fund offering for Indian startups

Revenue-based growth capital firm N+1 Capital has received approval from the Securities and Exchanges Board of India (SEBI) for its first investment fund.

The company is looking to raise US$20 million in their first close, which will take place within the next 40-50 days.

Letsventure Plus president Nimesh Kampani / Photo credit: Letsventure Plus

N+1 Capital follows an alternative method of raising capital for entrepreneurs. Through its founding venture partner LetsVenture, investors receive a percentage share of the ongoing monthly gross revenue of the businesses they invest in.

Established in March 2020 amid the pandemic, the Cat-II alternate investment fund is sector agnostic and caters to startups and micro, small, and medium-sized enterprises (MSMEs) that have been operational for over a year, and have a minimum monthly revenue of 50 lakh rupees (US$68,469) along with positive gross margins.

N+1 Capital will disburse a minimum ticket size of 1 crore rupees (US$136,900) and a maximum of 15 crore rupees (US$2.1 million). The fund has lined up about 50 companies and handed over term sheets to four of them, the firm told Tech in Asia.

The companies include some software-as-a-service (SaaS) providers, a direct-to-consumer company that sells its products on Amazon, and a retail tea chain.

“SaaS is a favorite field to invest in, given the nature of its recurring revenue,” N+1 Capital managing partner Rahul Chowdhury tells Tech in Asia. He added that the fund’s vision is to provide over 100 entrepreneurs an average of US$1 million each, helping them grow their businesses profitably and sustainably.

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The fund aims to make at least five to 10 investments every quarter and 30 deals a year. It expects an internal return rate in the 20% range from its investments.

“With startups now becoming conservative and reserving cash for better runway, debt is becoming a strong alternative,” said Nimesh Kampani, president of growth platform LetsVenture Plus.

Founded in 2013, LetsVenture claims it has helped over 300 startups raise 1,175 crore rupees (US$160.7 million). Its SEBI-registered angel alternative investment fund has assets under management of over 238 crore rupees (US$36.7 million).

In May 2020, it launched LetsVenture Plus, which enables ultra high-net-worth individuals and family offices to access investments across growth-stage private companies, unicorns, and global funds.

Currency converted from Indian rupee to US dollar: US$1 = 73 rupees.