The Singapore-based firm raised US$125 million (RM544.69 million) for the fund to finance young companies across Southeast Asia, securing new investors, including Japan’s Mizuho Bank and Israel’s OurCrowd Ltd. The fund had sought US$120 million to US$180 million, and took more than two years to reach the close.

Venture lending, or loans offered to start-ups, has attracted growing interest in recent quarters, as companies tap the debt market instead of raising equity. A cloudy global economic outlook has battered tech companies’ valuations, and venture firms have been struggling to raise capital amid a depressed market for initial public offerings (IPOs). Still, Southeast Asia remains a challenging market for raising both debt and equity, as many of its still-unprofitable start-ups are deemed high-risk by the world’s venture investors.

“It’s never easy to raise funds, and it’s been more difficult in this environment,” Jeremy Loh, co-founder and managing partner of Genesis, said in an interview. “This is a period of time where founders must be able to demonstrate that they can grow at a sustainable pace without relying on too much equity.”

More than 80% of the investors in Genesis’ first fund — such as Aozora Bank Ltd, Korea Development Bank and Silverhorn Group — also invested in its newest fund.

The second fund has already lent more than US$20 million to nine start-ups, including Aonic, Eezee Pte Ltd and Akulaku Inc, Loh said. Genesis extends debt to start-ups that don’t typically qualify for regular bank loans because they lack collateral or haven’t yet reached profitability. The company’s first US$90 million fund has financed 25 start-ups from Series A to pre-IPO in Southeast Asia. Its portfolio companies include Jakarta-based online lender Akulaku; and buy now, pay later start-up Pace.

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