‘Down round’ threat spurs Asian private credit funds

Huge financing: A pedestrian walks past signage for Kotak Mahindra Bank automated teller machines in Mumbai, India. The bank has raised one of the largest regional private credit funds over the past year. — Bloomberg

FROM India to Singapore, Asia is seeing a boom in private credit funds looking to tap into demand mainly from startups that are moving away from raising equity capital at a sharp discount to their valuations, known as “down round” in the industry.

At least US$2.5bil (RM11.7bil) in new private credit funds have been launched or planned in the first half of this year targeting startups in a handful of Asian markets, according to Reuters calculations based on reported deals and funds interviewed.