Indonesian investment firm Ideosource-owned new entity Gayo Capital is seeking to raise a $10-million venture debt vehicle this year targeting agriculture and social impact-related sectors, a top executive with the firm told DealStreetAsia.
Gayo Capital, helmed by co-founder Ishara Yusdian and managing partner Edward Chamdani, started operations early this year. Astra Ventura president director Jefri Sirait and Ideosourse managing partner Andi S. Boediman both serve as advisors.
Ideosource, which is funded by high net worth individuals, has two business units – Ideosurce Entertainment for film financing and a venture capital unit for early-stage startup investments.
Explaining the venture debt model of the proposed $10-million vehicle, Chamdani said, the firm will extend loan or debt to companies for a two-four year tenure with an option to convert it [debt] into equity.
So far, it has invested in five startups through the venture debt structure. These startups include agro commodities platform Inacom, cocoa farmers trading company PT Petani Kakao Lampung, recycling waste sugarcane WLabku, mini-mart Hydro Retailindo and an e-cigarettes firm Foom.id.
The firm may look at combining debt with an equity component by way of structures like warrants and convertible bonds. “Gayo Capital will focus on the upstream business as we see only a few VC firms venturing into that area,” he added.
According to him, venture debt is suitable for sectors that are heavy on cash flow such as logistics, maritime, energy, agriculture, and waste management. Gayo Capital is training sights on impact investment, agribusiness, supply-chain & logistic, lifestyle, and high-tech portfolios.
Aside from that, Gayo Capital also aims to develop another fund structure similar to the VC-PE model where it will seek investments from external LPs to invest in a 5 to 10-year closed-ended fund. This vehicle is targeted for pure tech plays.
The firm is also looking at the project financing model in partnership with lenders to support companies with working capital loans.