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Ajay Hattangdi & Vinod Murali Exit Innoven Capital to Start Their Venture Debt Fund

The duo are currently on a gardening leave till July end and are expected to launch their own venture debt fund later this year, even as Temasek has roped in someone to look into their replacement.

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Ajay Hattangdi and Vinod Murali, two executives who set up India's largest venture debt provider Innoven Capital along with Singapore's sovereign wealth fund Temasek, have put down their papers. The duo are currently on a gardening leave till July end and are expected to launch their own venture debt fund later this year, even as Temasek has roped in someone to look into their replacement.

The development comes two years after Temasek, along with Singapore-based bank UOB, acquired SVB India Finance, an arm of Nasdaq-listed SVB Financial Group, for about Rs 300 crore in a quasi-management buyout.

After the buyout, SVB India Finance was renamed as Innoven Capital Group. Hattangdi, who was later  joined by Murali, launched US-based SVB Financial's venture debt business in India in 2008 and were part of the buyout. Hattangdi was the  India CEO at Innoven, driving international expansion in Southeast Asia  and China as well. Murali was deputy CEO of India operations.

“Temasek has roped in Spencer Stuart to hire the India CEO and they have already started reaching out to candidates,“ said one of the sources directly  briefed on the development. It is not clear yet if any of the other  Innoven team members will join the duo, and if their stake in Innoven  will be bought back by Temasek.

Hattangdi and Murali, both of whom were  earlier with Citibank, launched SVB's venture lending operations here in  2008 and played a key role in pioneering the asset class in this market.

Venture lenders target companies backed by venture  capital and private equity investors, offering debt that is a percentage of equity mobilised by the company from them. The debt is extended  through secured loans and warrants and is typically used to finance working capital.

Debt from a venture lender like Innoven helps  startups extend the runway between two equity rounds of funding. This has especially been true in the last two years for Innoven, which operates through a non-banking finance company (NBFC).

Since the buyout in 2015, it has doubled the total capital deployed from $110  million to $225 million at the end of March 2017. The firm was planning  to deploy another $80-100 million this year. Temasek already operates a  debt business in India through its NBFC arm, Fullerton India Credit Company, which largely targets the SMEs sector.


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