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Temasek, DBS launch $677m debt financing platform for tech firms in Asia

Temasek, DBS launch $677m debt financing platform for tech firms in Asia

SATURDAY, July 31, 2021

SINGAPORE - State investor Temasek and DBS Bank will jointly launch a US$500 million (S$677 million) growth-stage debt financing platform.

Called EvolutionX Debt Capital, the platform will provide non-dilutive financing to growth-stage technology-enabled companies across Asia, with a focus on China, India and South-east Asia.

Companies at the growth stage tend to seek more capital as they look into expanding their market reach and diversifying their businesses.

EvolutionX will be headquartered in Singapore.

It will invest in opportunities arising from an increasingly digital economy - across sectors such as financial services, consumer, healthcare, education and industrial development - to accelerate growth and build the next generation of technology leaders, the two Singapore institutions said in a joint statement on Friday (July 30).

The platform combines Temasek's investment expertise and DBS' global banking networks to capitalise on the fast-growing technology ecosystem in Asia, they added.

It will be led by joint interim chief executive officers - Mr Amit Sinha, head of telecoms, media and technology at DBS's institutional banking group; and Temasek's investment (innovation) director Aftab Mathur.

A full-time chief executive will be appointed in the next few months.

DBS' group head of institutional banking Tan Su Shan said the investment is an opportunity for the bank to play a role in nurturing and financing the growth of Asia's future unicorns, while forging partnerships and ecosystem opportunities with high-growth technology-enabled companies.

"Growth debt is fast emerging as an alternative source of financing for high-growth technology companies that traditionally only raised equity as a source of capital," she said.

"Apart from helping founder entrepreneurs avoid dilution of share equity in the company's initial stages of development, growth debt also serves as a complementary tool to tide these companies, which are often cash strapped, through unexpected market and economic headwinds by extending their cash runway."

Temasek's chief investment strategist Rohit Sipahimalani said the platform will be "a meaningful alternative for technology-focused growth companies in Asia that may face debt funding needs between the venture debt and late-stage debt financing phases".

"With EvolutionX, we can help provide companies and entrepreneurs the support they need as they continue to scale and expand," he added.

Temasek also has a joint venture with United Overseas Bank providing debt financing to start-ups.