BlackSoil provides $40 million in debt venture capital financing in the first quarter of FY23

26 Aug 2022 , 09:31 AM

BlackSoil, a provider of debt financing, announced on Thursday that it had reached $300 million in venture capital transactions, helping more than 100 firms expand their businesses. BlackSoil reported the highest-ever year-over-year (YoY) growth in Q1FY23 amid broader economic turbulence and the effect of Covid-19, investing $40 million in more than six agreements.

We made investments in two unicorns this quarter. Our AUM (assets under management) increased by 55% year over year. In addition, growth across our portfolio firms has led to 7 full exits that were successful throughout the quarter, which is a credit to the caliber of our underwriting. Since their creation, our investee firms have raised $7 billion via equity, including $1.5 billion in FY22 alone, according to a news statement from the company.

Cash has been hard to come by for startups due to the unfavorable trend in capital markets. As the rate of mergers and profitable exits slows, equity investors are acting cautiously. Venture finance providers are fast becoming the preferred business partners for both start-ups and investors as they look for funding and safer investments, respectively. In 2022, it will be common to see late-stage entrepreneurs working with debt financing sources.

“We still believe that venture debt is the best substitute for equity in the present market environment. Therefore, regardless of the industry they serve, market positioning, the strength of the underlying business model, the cash-conservative character of companies, positive unit metrics, and longer runways are some of the important criteria we are now considering before we are placing a wager.

A SEBI-registered alternative investment fund and an NBFC registered with the RBI make up the alternative credit platform that BlackSoil runs. It has deployed $300 million over 130 projects using several platforms, and it has an AUM of over $100 million.

Nine unicorn Upstox, Slice, Mobikwik, Udaan, Infra.Market, Zetwerk, OYO Rooms, Spinny, and Purplle–as well as other well-known businesses like a top cloud kitchen provider and Curefoods, a pioneer in “buy now, pay later,” are among the investments made by BlackSoil.

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