Banking major DBS and Singapore sovereign fund Temasek have signed an agreement to jointly launch EvolutionX Debt Capital, a US$500-million development-stage debt financing platform.
Based in Singapore, EvolutionX aims to accelerate growth and nurture the next generation of technology leaders.
It will invest in ventures originating from an increasingly digital economy, spanning sectors such as financial services, consumer, healthcare, education, and industrial development.
EvolutionX is currently focusing on offering non-dilutive funding to development stage technology-enabled businesses in China, India, and Southeast Asia, among others.
DBS’s worldwide banking networks will leverage Temasek’s investment experience to further catalyse Asia’s fast-growing technology ecosystem through EvolutionX.
The platform will currently be co-led by joint interim CEOs, namely Amit Sinha, Group Head (Telecoms, Media and Technology), Institutional Banking Group at DBS, and Aftab Mathur, Director of Investment (Innovation) at Temasek. It will appoint a full-time CEO in the coming months.
“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.
According to Tan Su Shan, Head of Institutional Banking at DBS, growth debt is quickly gaining traction as an alternative form of funding for high-growth technology businesses that have previously relied only on equity financing. This provides more resources to nurture and finance the growth 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 currently offers venture debt to early-stage tech startups via Innoven Capital.
Image Credit: Temasek
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