Startup to Scaleup: Focus on ValuAble, a venture debt fund for startups

The startup ecosystem in India has experienced remarkable growth, surging from about 350 startups before 2014 to a staggering 90,000 in 2023, accompanied by the emergence of over 100 unicorns, as per a government report. This substantial expansion has been fueled by funding from venture capitals, enabling startups to thrive.

To understand this ecosystem better, Avni Raja from Editorji interviewed Rahul Gupta, Founder and Managing Director of ValuAble.

What is ValuAble?

ValuAble, a venture debt fund in India, is currently undertaking its inaugural fundraising campaign, aiming to secure approximately ₹850 crore (slightly over $100 million). The funds raised will be strategically invested in new age, technology-driven and inclusive startups in India and globally.

The rising awareness about venture debt

Talking about startup funding in India, Gupta underlined the increasing awareness surrounding venture debt. He went on to highlight the anticipated exponential growth of venture debt, projecting a tenfold increase by 2030. He also talked about the entry of banks in the venture debt space.

ValuAble's investment criteria

Discussing Valuable's investment criteria, Rahul Gupta said that the current focus of the fund is on series A startups and beyond. He outlined key targets, specifying an average debt life of 18 months and an average deployment amounting to $2.5 million. He also highlighted the strategic decision to steer clear of sectors such as alcohol, tobacco and gambling. On the other hand he stressed on ValuAble's commitment to Environmental, Social, and Governance (ESG) principles in the investment strategy.

Pitfalls of excessive debt

In this conversation with editorji, ValuAble founder underscored the importance of maintaining control over leverage. He cautioned against the potential pitfalls of excess debt, call it a 'pill which becomes poison on excessive consumption.'

Indian startup ecosystem: The big picture

Rahul Gupta also shared his insights on the current state of India's startup ecosystem. He said that not only the governmen but all the other stakeholders also are commited towards growth. He also cited the presence of over 20,000 startups in the disability space as an example of the vibrant atmosphere within India's startup ecosystem.

Funding picure, respect for capital

Talking about the 'funding winter' in the startup space, Rahul Gupta pointed out the emergence of a substantial $2 billion equity funnel. He also underscored the growing awareness among entreprenuers regarding the importance of respecting capital.