Genesis Alternative Ventures is more than just the first firm focused on venture debt in South-East Asia, its founders are the architects of the asset class in the region.
The Singapore-based firm was founded in 2018 with the mission of bringing a Silicon Valley-flavored venture debt strategy to the region as a fresh option for LPs looking to diversify and for venture-backed companies hungry for alternative financing.
The firm is targeting up to $70 million for its debut fund, Genesis Alternative Ventures I, and grabbed a new commitment from Capria, a Seattle emerging markets fund of funds, last week.
The future looks bright for Genesis, as co-founder and managing partner Jeremy Loh said the firm is just getting started.
Loh and co-founder and partner Martin Tang, met a few years ago while building out the venture debt practice for the DBS Bank based in Singapore and quickly became friends. Loh said they found themselves working a lot on educating the market on what venture debt was and its potential because it was so new to the region, but inquiries quickly picked up.
“We found an increasing demand and we felt that a private venture debt fund structure would actually be more suited to addressing that need not only from the company standpoint but also from the investor standpoint,” Loh said.
The pair, along with the firm’s third co-founder Ben J Benjamin of the FJ Benjamin fashion empire, launched the fund in 2018 and have been able to secure a number of core LPs.
The firm currently has five portfolio companies, including Singapore-based Hmlet, a co-living company that has raised $48 million, and Jakarta-based co-working company GoWork, which has raised $13 million.
“We found an increasing demand and we felt that a private venture debt fund structure would actually be more suited.”
Tang said that the firm lends across the venture lifecycle and industries but has found many good attractive opportunities in B2B enterprise space due to the business models and maturity of these companies making them prime candidates to take on venture debt.
“The market is still growing,” Tang said. “We are at the very beginning of venture debt and companies are only starting to mature now.”
The firm’s latest investment from Capria will help Genesis further expand its strategy into investing with an impact lens, which is something Loh said the firm was already very conscious of and eager to develop.
“When Capria came along it made sense, we are very much on the cusp of impact [investing],” Loh said. “We don’t have the impact DNA in us, but Capria is a very experienced impact fund investor. IFC invests as well as the Ford Foundation. We hope to leverage their knowledge and know how to be a better impact and ESG investor.”
Tang added that the investment also gave the firm a new layer of legitimacy and shined a light on the vast potential opportunities in the budding venture debt market in South-East Asia.
“For Capria, and other US investors we are seeing come in, we hope to show the potential of the South-East market,” Tang said. “We are really just in the early stages in the growth of even venture capital. We have a huge and long runway to grow there.”
The firm also said that launching prior to the spread of covid-19 wasn’t necessarily a negative as the firm has seen increased inbound and dealflow this year due to virus-fueled downturn.
“We were caught by surprise,” Loh said. “There are a lot of companies looking for funding and the heightened interest in venture debt gave us an edge. We saw an uptick in inquires over the months of March, April and May.”
Now with fresh capital, and a purpose with a profit mindset, Genesis is ready to tackle the growing opportunity and pioneer what other venture debt firms in the region may look like in the future.
“I’d say right now we are really pushing the envelope and really on the forefront of the cutting edge of growing the venture debt ecosystem that we have, and gaining marketshare in what is really a nice white space with a long runway for the asset class in South-East Asia,” Tang said.