Genesis Alternative Ventures raises $125m for second fund

(From left) Genesis Alternative Ventures founders Martin Tang, Ben J Benjamin, Jeremy Loh, and Eddy Ng / Photo credit: Genesis Alternative Ventures

Genesis Alternative Ventures has raised US$125 million in the final close for its second venture-debt fund focused on Southeast Asia.

The majority of investors are returning backers from the venture lender’s first fund. They include Sassoon Investment Corporation, Korea Development Bank, Silverhorn, Aozora Bank, and Mizuho Leasing.

Japanese banking firm Mizuho Bank and US-based investing platform OurCrowd jump in as new investors.

The current slowdown in fundraising has affected both fund managers and startup founders, but as Genesis partner and co-founder Ben J Benjamin put it, it is business as usual.

“There is never an easy time to raise money. It’s just more difficult sometimes, and this has been a challenging period,” he told The Business Times.

There is an appetite for this kind of product, as evidenced by investors’ capital commitments, and Genesis is seeing opportunities in its deal pipeline. About 20% of the fund has already been deployed to startups like drone service provider Aonic, orthodontics brand Zenyum, and reverse logistics firm Returnkey.

There was a deliberate attempt to moderate the amount to raise, with the fund size smaller than what VC funds have raised in the last two years. With a target of between US$120 million to US$150 million, the fund has hit its mark, said Benjamin.

“It’s a right-size fund, given the ecosystem we’re in, and it’s already quite an increase from the first fund (US$80 million),” added Jeremy Loh, co-founder and partner at Genesis.

The venture lender is seeing opportunities in three buckets. These are: traditional venture debt, which augments an equity round without diluting it; profitable startups looking for debt capital to grow; and companies raising funds for mergers and acquisitions.

With these new ways of utilizing debt, more companies are now open to dealing with Genesis.

For now, venture debt is still the main contributor of business for the company, but Loh puts it down to many not being savvy with debt. The presence of larger players such as HSBC in the venture debt ecosystem has helped it mature more quickly.

Genesis also announced that Philip Yeo, former chairman of the Singapore Economic Development Board, has joined its advisory board.

“We are also delighted to welcome Yeo to our advisory board, a true statesman and visionary in the technology and investment space,” said Loh.