DBS and Temasek to launch debt financing platform in Asia
By Leandra Monteiro
DBS and Temasek announced that they have entered into an agreement to jointly launch a US$500 million growth stage debt financing platform, called EvolutionX Debt Capital. Based in Singapore, EvolutionX will provide non-dilutive financing to growth stage technology-enabled companies across Asia, with a focus on China, India, and Southeast Asia.
The growth debt capital space presents a significant opportunity, and EvolutionX 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.
Beyond creating a financing solution to fulfil capital funding needs within the industry, this partnership also serves as a natural extension and segue to both DBS’ and Temasek’s existing early-stage debt initiatives and investment activities, bolstering the strength of the extended network and ecosystem through synergies fostered. EvolutionX combines Temasek’s investment expertise and DBS’ global banking networks to leverage and further catalyse the fast growing technology ecosystem in Asia.
Tan Su Shan, Group Head of Institutional Banking, DBS said, “The investment in EvolutionX provides an opportunity for us to play an integral role in nurturing and financing the growth of Asia’s future unicorns, while forging partnerships and ecosystem opportunities with these high-growth technology-enabled companies. As a purpose-driven bank, we believe in investing in solutions that democratise financing access to companies of all sizes and stages of development to give them the best opportunity to achieve their endeavours.”
“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. 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.”
Rohit Sipahimalani, Chief Investment Strategist, Temasek said, “Technology and digitisation will have a pervasive impact across many sectors, and will continue to transform our economies and communities. Temasek believes in the purposeful use of our capital to create and catalyse solutions for gaps we see today, to stimulate innovation and growth for long term, sustainable value.”
“We’re therefore pleased to partner with DBS to provide 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.”
The platform will be led by Joint Interim CEOs Amit Sinha, Group Head of Telecoms, Media and Technology, Institutional Banking Group at DBS, and Aftab Mathur, Director, Investment (Innovation) at Temasek, before a full-time CEO is appointed in the next few months.