Thai fashion company backed by InnoVen Capital
INNOVEN Capital, a joint venture between Singapore’s United Overseas Bank and Temasek Holdings, has signed two new debt-financing agreements with e-commerce start-ups in Southeast Asia.
This quarter, InnoVen signed financing deals with Malaysia-based KFit Holdings, an e-commerce health and fitness company, and Thailand-based Pomelo Fashion, an e-commerce fashion company.
Both companies will be using the loans to develop their business in the region.
InnoVen will provide loans totalling US$5 million (Bt175 million) to help KFit Holdings and Pomelo cater to the fitness habits and fashion trends of Asia’s growing affluent population, which is expected to account for two-thirds of the world’s middle-class consumers or about 3.2 billion people by 2030.
These start-ups are among the 20 Southeast Asian, Indian and Chinese companies that InnoVen has identified for venture debt funding in the next six months. These companies are operating in the fields of e-commerce, financial technology, logistics and big data.
Eric Tham, managing director and head of commercial banking at UOB, said venture debt was important in nurturing Asia’s entrepreneurs and encouraging innovation.
“UOB was formed by enterprising minds and has been supporting the growth of SMEs for more than eight decades. We see the importance enterprise plays in economic growth and are committed to ensuring that the best start-ups have the necessary funding support to develop into world-class businesses.
“This in turn will help to drive the economies of Asia,” he said.
InnoVen was set up last year with the aim of providing high-growth and innovative Asian start-ups with up to $500 million in loans over the next five years.
According to an Ernst & Young report, the potential market size for venture debt in Singapore, China and India from 2015-19 is $2.2 billion.
Chin Chao, chief executive of InnoVen in Southeast Asia, said the current momentum of the firm demonstrated the importance of venture debt as an alternative funding source to traditional equity financing by venture capitalists.
As part of InnoVen’s investment mandate, the company is seeking companies with differentiated business models that have the potential to become leading global businesses.
Thailand-based Pomelo Fashion has been identified by InnoVen as having high growth potential.
The company uses e-commerce to market and sell its brand of apparel, accessories and footwear to the rising affluent population in Southeast Asia.
Casey Liang, co-founder of Pomelo Fashion, said that for a start-up such as Pomelo, funding was often critical as it accelerated its growth, expanded into new markets and invested in new capabilities.
UOB and Temasek have each committed up to $100 million in paid-up capital to InnoVen.
