Business-to-business (B2B) may surpass fintech as the sector in India that is most attractive for venture loan funding this year, according to data released on Friday.
The consumer and electric vehicle (EV) sectors may develop into the second-most popular area for such financing, according to the India Venture Debt Report by Stride Ventures. 150 start-up founders and venture capital (VC) firms took part in the second survey of its kind.
In terms of money disbursed, fintech today outpaces B2B commerce, and the two sectors collectively account for more than 70% of venture loan transactions in India.
According to the survey, 82% of startup business owners said they intended to improve the profitability and scale of their organisations in 2023. Around 79% of VC firms prioritise profitability, whereas 21% want to expand. Last year, 68% of entrepreneurs and 55% of venture capitalists reported being more concerned with growth than profitability.
The founder and managing partner of Stride Ventures, Ishpreet Singh Gandhi, asserted that venture debt has become one of the key drivers of development for Indian start-ups. Because more people are aware of this asset class and have positive expectations for the future of the market, venture debt has been able to more successfully showcase its non-dilutive characteristics and ability to unleash development.
In contrast to 50% of late-stage founders and 20% of growth-stage entrepreneurs, 71% of early-stage firm founders aim to raise venture financing in 2023. Up to 74% of venture capitalists would advise their portfolio companies to incur venture debt in 2023.
Growth-stage founders were 100% confidence in raising venture debt last year, compared to 67% of late-stage founders and 86% of early-stage entrepreneurs.
