Temasek and United Overseas Bank (Singapore) backed venture debt firm InnoVen Capital (InnoVen) Wednesday announced that it had invested in two later-stage, technology-driven enterprises in the region.
InnoVen, that is active across India and Southeast Asia, and is also expanding to other high-growth economies in the region, said it has stuck deals to invest in 123RF, a provider of stock images and graphics in Asia, and Conversant Solutions, a regional digital media enablement and solutions provider.
Both 123RF and Conversant Solutions don’t necessarily qualify as startups, and therefore reflects the expanded scope of the venture debt firm, that is now looking to extend capital to larger enterprises, even as it continues to back venture capital funded early stage startups.
“InnoVen isn’t limited to funding earlier-stage companies. We also provide venture debt to larger tech enterprises as a complimentary funding source to equity financing. Both the 123RF and Conversant deals exemplify the important role that venture debt plays throughout a company’s life-cycle,” said Chin Chao, CEO, InnoVen Capital Southeast Asia.
Venture debt allows companies to raise capital in a way that minimizes equity dilution for founders and existing shareholders.
“InnoVen has an exceptional team that truly understood our business. The InnoVen team worked with us closely throughout the financing process to provide a unique and customised hybrid solution that was sensitive to our growth needs. The funds will be used for operating expenses,” Andy Sitt, Co-founder of 123RF, said.
Founded in June 2005, 123RF crowd-sources digital content (images, vector, footage and audio) from more than 300,000 contributors worldwide. The content is curated and placed on the platform to serve a monthly active user base of more than 12 million users. The platform has about a million paid users/subscribers.
123RF, a part of the Inmagine Group, competes with the likes of Shutterstock, Getty and Adobe Stock, and provides localised service in 44 offices worldwide.
Currently, Sitt and his wife Stephanie own 100% of the company, and this is also marks the first instance of 123RF raising capital from outside. “The company is bootstrapped and innoven is our first debt,” Sitt told this portal.
According to him, 123RF will use the funding for expanding its operations, and has lined up a few acquisitions, which are set to be announced soon.
On growth prospects in the region, Sitt said, “The growth in the SEA market is one of the highest in the world for us. Though it still a small market (less than 5%), the growth is amazing. The key of marketing to the SEA audience is the pricing strategy. We bring convenience to the users at very affordable pricing.”
“Venture debt allow us to keep our equity which is a cheaper form of financing,” he added.
Adding to the same, Cheong Kong Wai, CEO, Conversant Solutions, said, “Venture debt give us the flexibility to accelerate our expansion without shareholders dilution. Going forward, we want to deepen our presence in Southeast Asia as we see tremendous growth opportunities in Southeast Asia.”
Conversant’s SwiftMedia is an end-to-end integrated solution that enables content publishers to offer their digital content to end users on-demand anywhere and on any device. It charge the customers based on subscription and usage for using our SwiftMedia cloud services.
The platform competes with other digital media enablement cloud providers such as Amazon AWS, Akamai.
“We will differentiate ourselves by providing customers the ability to deploy a hybrid cloud offering (i.e. their own private cloud and the ability to scale out to our public cloud). We have deployed our public cloud infrastructure across Southeast Asia with deep in country presence to support our customers,” Wai added.
When asked the amount Coversant has got from InnoVen through the latest funding, Wai said, “We are private and do not wish to disclose our funding history.”
InnoVen started operations in 2008 in India and was bought out by Temasek Holdings and UOB Group in 2015. That same year, the firm established its office in Singapore to service the needs of its clients across the South East Asian market including Malaysia, Indonesia and Thailand across e-commerce, financial technology, logistics and big data sectors.
The firm currently has investor commitments of $200 million. It has extended 120 loans worth Rs.1,100 crore since 2007, of which 87 loans were extended to start-ups such as Snapdeal, Myntra, Freecharge, among others, Mint reported.
It further plans to provide $500 million in venture debt loans over the next five years to startups in China, India and South East Asia.