For Asia’s tech startups Temasek, DBS together will launch growth US $500 M debt financing platform
DBS and Temasek, a Singapore sovereign fund, have joined forces to establish EvolutionX Debt Capital, a US$500 million development-stage debt financing platform.
EvolutionX, based in Singapore, strives to boost growth and develop the next generation of technology leaders.
It will put money into businesses that emerge from an increasingly digital economy, including financial services, consumer goods, healthcare, education, and industrial growth.
EvolutionX is now concentrating on providing non-dilutive investment to technology-enabled firms in China, India, and Southeast Asia, among other places.
Through EvolutionX, DBS’s global banking networks will utilise Temasek’s investment knowledge to further catalyse Asia’s fast-growing technology sector.
Amit Sinha, Group Head (Telecoms, Media and Technology), Institutional Banking Group at DBS, and Aftab Mathur, Director of Investment (Innovation) at Temasek, will presently co-lead the platform. In the next months, it will hire a full-time CEO.
“We aim to provide a meaningful alternative for technology-focused growth companies in Asia that may face debt funding needs between the venture debt and late-stage debt financing phases,” said Rohit Sipahimalani, Chief Investment Strategist at Temasek.
Growth debt is fast gaining popularity as an alternative type of finance for high-growth technology firms that have historically depended only on equity financing, according to Tan Su Shan, Head of Institutional Banking at DBS. This means there will be more resources available to foster and fund the development of Asia’s future unicorns.
“Apart from helping founder entrepreneurs avoid dilution of share equity in the company’s initial stages of development, growth debt also serves as a complementary tool to tide these companies, which are often cash strapped, through the unexpected market and economic headwinds by extending their cash runway,” added Shan.
Temasek’s Innoven Capital presently provides venture finance to early-stage software firms.
