• India

     
  • SVB India Office

    SVB India Finance: India's premier venture and growth debt provider for high-growth companies

    For more than a decade Silicon Valley Bank has paved the way for innovation in India by building key relationships with and for VC-related businesses.

    SVB India Finance Private Limited was started in Mumbai in 2008 and is positioned as India's first and only specialty lending business targeting high growth entrepreneurial companies in India backed by top-tier venture capital and private equity investors. We offer multiple sources of diverse debt capital including venture debt, acquisition financing, growth capital and capex financing.

    The team's experience in dealing with early and growth stage companies combined with a deep understanding of the local venture market dynamics and established relationships with the venture community enables us to serve tailor made financing solutions structured specifically to support fast growing entrepreneurial companies with greater flexibility and safety.

    SVB has worked with thousands of innovative companies worldwide. Now it's your turn.


    Venture Loans

     

    Venture Debt Defined

    A start-up company typically receives several rounds of equity investment from its investors with each round providing sufficient capital to achieve predefined milestones. Upon reaching its milestones, a company will need to raise a subsequent round of financing to finance further growth. Providing some debt financing between VC rounds ("Venture Debt") helps companies and investors 'extend the cash runway' of their investments. By using debt, the company is able to access capital without giving up as much equity. The debt can be used to finance the company's growth and capital expenditure requirements enabling venture capital 'equity' to be reserved for funding business critical activities such as accelerating product development or making key hires.

    Additionally, by providing companies with a flexible cushion of capital, venture loans serve to stretch the amount of time between equity rounds and help entrepreneurs reach the next valuation milestone in their company's life cycle. Put differently, venture debt enables the entrepreneur to run the company for a longer period of time, increasing the enterprise value of the company, before raising more equity money.


    How Venture Debt Differs From Traditional Bank Loans

    Traditional bank loans are rarely available to startups or young companies. When available, bank loans are either insignificant in size, involve severe limitations on the use of funds, or are painfully over-collateralized with promoter guarantees and personal pledges. Dealing with traditional lenders that don't understand the model of lending to early stage companies can detract management attention from focusing on the operational aspects of building their businesses.

    SVB on the other hand, has been dealing with early stage companies for almost 30 years. Our venture debt financing is structured specifically to support start-up and early stage entrepreneurial companies with greater flexibility in loan amounts and structures as well as a more reasoned approach to the manner in which loans are secured and monitored.

    In addition, SVB is generally recognized by both clients and investors as a 'patient lender'. The philosophy has always been to build on the trust and relationships with clients and work through tough situations, especially in deals involving early stage companies where there is a greater need for flexibility as lenders.


    When Should A Company Raise Venture Debt?

    The best time to raise venture debt is in conjunction with or immediately after raising a round of equity, i.e. when there is the most capital in the company.  It can be done at other times, but often with less favorable terms. Venture lending is appropriate at the following times:

    • As part of a funding round where, for example, rather than raise $10 million in a funding round, a company can raise $7.5 million in equity and $2.5 million via venture debt
    • To extend cash runway when a company knows that it will need to raise another funding round in 12 months, but would like to extend that timeframe to 18-24 months
    • As the last round before an exit instead of, or in addition to, an internal round where taking venture debt will help the investors/promoters receive roughly the same amount with less investment on their part if a venture loan is taken to top up growth capital
    • As working capital in a situation where even though a company has sufficient operating cash, it needs cash for working capital and can extend its resources via a debt facility
    • To finance purchase of equipment or finance office expansions and buildouts, for which equity would be a more expensive alternative
     

    Benefits of Venture Lending

    • Extends the "cash flow runway" for the company and makes it easier to achieve the next valuation milestone
    • Venture lending represents a less dilutive type of financing than venture capital financing since venture lenders generally require less of an ownership position
    • Venture lenders typically take less of an advisory role in its portfolio companies and do not serve on the corporate board of directors
     

    Growth Loans

     

    Growth / Mezzanine Debt

    Changes within the Indian banking industry are meaningfully reducing the availability of bank credit to middle-market companies. Existing lines of credit have been reduced. New loans from traditional lenders are harder to obtain. Banks are restricted from acquisition financing. Where then, does the typical middle-market company turn for additional capital? Our growth and mezzanine loans help to close the gap between debt and equity.

    We look for the following in our target companies :

    • Primary focus on growth stage VC-backed companies
    • Qualitative attributes

      Disruptive product or service
      Significant IP or display of innovation
      Top-tier VC sponsorship

       
    • Financial attributes

      High and sustainable growth rates

       
    • Recurring revenue model with a minimum target run rate of $15 million per year
    • Profitable or on track to be profitable within 12 to 18 months
    • We can also selectively pursue opportunities involving VC & PE-led buyouts
     

    Portfolio

     
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  • SVB India Finance Pvt Ltd is a subsidiary of Silicon Valley Bank. SVB India Finance Pvt. Ltd. is a non-banking financial company registered with, and regulated by, the Reserve Bank of India under Section 45-IA of the Reserve Bank of India Act, 1934. SVB India Finance Pvt. Ltd. is not authorized to, and does not, accept public deposits and the information contained in this Web site shall in no event be construed as invitation, soliciting, inducement or an advertisement of any nature for the acceptance of public deposits.