Singapore-based investment institution Lighthouse Canton has announced the first close of its newly launched Venture Debt Strategy at $20 million.

Lighthouse Canton said in a statement on Monday that its regional Venture Debt Strategy comprises a Singapore based Variable Capital Company (VCC) for investments in South East Asia, and a Category II Alternative Investment Fund (AIF) for investments in India.

Lighthouse Canton is targeting to raise $100 million for this strategy.

According to the statement, the fund shall provide debt capital to technology-enabled companies which are part of the startup ecosystem in the region.

Lighthouse Canton said for companies with sound business models and viable unit economics, venture debt is an alternative source of growth funding, which is gaining traction amongst regional startup companies now.

Cited CB Insights, it said that in recent years, Asia’s startup ecosystem has witnessed a boom, attracting 38 percent of all venture capital deal flows globally last year.

At the end of 2022, it said there were 1,205 unicorns globally, with 27 percent hailing from Asian countries such as China, India, South Korea, Indonesia, and Singapore.

Indian startup ecosystem is the third largest in the world, only behind the United States of America and China, with nearly 10 percent of all global unicorns based in India, it added.

“As the pace of venture capital activity continues to grow, it is logical that we would see a rise in venture debt demand,” said Lighthouse Canton’s Global Head of Asset Management, Sanket Sinha.

“In more mature venture ecosystems such as the United States and Europe, venture debt has risen to 15 percent to 20 percent of the total venture capital funding, whereas this proportion is less than 2 percent in India and South East Asia,

“Given the growth of venture ecosystem in India, we see tremendous opportunity for venture debt, and we expect the size of this market to grow 3 times to 4 times in the next five years,” he added.

Meanwhile, Lighthouse Canton Director for venture debt Ankit Agrawal said :”Given that our venture debt strategy is regional, we can also support a startup with aspirations to expand out of the domestic market.”

“Our presence in other markets uniquely positions us to partner with companies with international expansion plans and help them with their financing needs,

“Our investors and partners appreciate the value we bring to the ecosystem, and we are witnessing healthy demand for this asset class. Lighthouse Canton Venture Debt fund expects to deploy the capital in the next two years across 35 to 40 companies,” he added.

Lighthouse Canton has been actively building its capabilities in the venture investment space, and this is the second fund launched within one year focused on the venture ecosystem.

Earlier this year, Lighthouse Canton partnered with Nueva Capital to launch its maiden venture capital fund, LC Nueva, focused on pre-series A and series A companies in India.

The fund was oversubscribed and had successfully applied for additional capacity with the regulator.

Headquartered in Singapore, Lighthouse Canton is a global investment institution with wealth and asset management capabilities.

The firm has over 100 experienced professionals in Singapore, Dubai, and India, and it oversees over $3 billion worth of assets under management and advisory (as of September 30 2022).

Lighthouse Canton has a dedicated strategy to cater to the needs of startups and their founders.

Lighthouse Canton’s Founders Ecosystem, as it is known, is the firm’s commitment to helping startups and their founders enhance performance and plan for their personal and business legacies at various stages in their life cycles.

The initiative provides founders and startups added value through other venture investments, and business solutions as well as personal wealth management services.

These solutions range from funding solutions for companies across the capital structure to pre- and post-monetization funding needs of the founder.

The firm also works closely with the founders and senior management on business structuring and personal wealth solutions.

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