Anthill Ventures is gearing up to launch a hybrid fund targeting the startup sector amid a surge in investor interest in India, Bloomberg reported. This move comes in the wake of a slowdown in the Chinese economy.

Anthill founder and CEO Prasad Vanga said the company plans to raise $100 million for a hybrid private credit and equity fund to support Indian startups specialising in consumer experiences, wellness, and entertainment.

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Portfolio composition

Vanga highlighted that the fund’s portfolio will consist of technology startups and consumer brands, all denominated in US dollars. Financing for the brands is expected to take the form of debt initially, with the potential for conversion into equity as the companies expand, as per the report.

The global private credit market, valued at $1.7 trillion, has emerged as a formidable alternative to traditional lending, offering investors higher returns. India, in particular, has attracted significant attention in this space, drawing interest from global firms like Cerberus Capital Management LP and Varde Partners LP, it added.

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Addressing Financing Challenges

For Anthill Ventures, the move into the private credit sector presents an opportunity to support startups often overlooked by traditional banks. “Securing debt in India is tough as banks typically want security and don’t accept startup company valuations. So that’s a huge opportunity for us,” Vanga told Bloomberg.

According to information available on Anthill’s website, Vanga has a track record of backing successful companies, including Tynker, a coding platform acquired by online education giant Byju’s in 2021.

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(With inputs from Bloomberg)

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Published: 02 May 2024, 09:41 AM IST