OYO-backer BlackSoil raises new debt fund of Rs 250 crore

The rise of venture debt has been one of the prominent trends in investing in India over the last 15-18 months, as public equity markets go through a ‘funding winter’. BlackSoil, a Mumbai-based alternative credit platform, has raised a new Rs 250 crore-fund through family offices, notable UHNIs / HNIs, and other marquee institutions. 

“The funds raised will be lent to mid and growth-stage startups, through a variety of debt products,” Ankur Bansal, Director & Co-Founder, BlackSoil, said in a statement. “Despite near-term challenges and rising interest rates, we stand confident in our strategy. Our products are providing safety of investment along with stabilized returns supported by our proprietary underwriting and resilient credit performance,” he added.

BlackSoil, which has backed unicorns such as OYO, Udaan, Upstox, Infra.Market, Slice, Spinny, among others, has deployed over $300 million across 130-plus deals over the last six years. It manages an alternative credit platform made up of an RBI-registered NBFC and four SEBI-registered AIFs. The fund’s average cheque size is Rs 15-20 crore. 

BlackSoil’s deployment peaked in FY 2021-22, coinciding with the funding highs of India’s start-up ecosystem. In the period, the fund invested $90 million in 30-odd start-ups across emerging sectors. In the first quarter of the current financial year (FY23), BlackSoil invested $40 million in 6+ deals, and grew its AUM by over 50 per cent year-on-year.  

Data from Venture Intelligence reveals that venture debt deployment in India has grown 11 per cent year-on-year to $312 million in August 2022. Besides BlackSoil, other active debt funds in India include Alteria Capital, Trifecta Capital, Stride Ventures, InnoVen, Anicut Capital, and more. 

With equity funding, especially in late-stage deals, going through a sustained slowdown, debt capital is likely to find more favour among start-ups. Some of BlackSoil’s other portfolio companies include Zetwerk, Purplle, BluSmart, Curefoods, AllCargo Logistics, Aviom, etc.

Through the new fund, it looks to provide necessary runway to start-ups in the form of working capital solutions, acquisition financing, and other short-term funding requirements without diluting their cap-table. The slowdown in venture capital and private equity has allowed alternate funds to increase their cheque sizes and participate in larger deals. 

Bansal explains, “The onward lending we will be doing with these funds are via products with amortizing & fixed pay-out structures which significantly reduce business & time risk, and safeguard the investment. This has enabled us to raise this capital even amidst market volatility.”

Over 20 family offices and high-net worth individuals have invested through Blacksoil's debt products. “Strategic partnerships, acquisitions and talent addition have bolstered our organic initiatives to expand and deepen our vision to be a sought-after partner to founders, enterprises and investors,” Bansal stated. 

Earlier in 2022, WSB Real Estate Partners and BlackSoil Group came together to raise a Rs 500-crore residential property debt fund WSB Real Estate Debt Fund II, which looks to invest in residential real estate projects for middle income households and in the affordable housing segment. 

Also Read: Fintech NBFC LivFin raises $2 mn from venture debt player BlackSoil

Also Read: Winter is not coming in early-stage deals: This fund backed 26 start-ups in H1 2022