Lighthouse Canton hits US$20M first close of its maiden venture debt fund

Singapore-based global investment firm Lighthouse Canton has made the first close of its newly launched venture debt fund at US$20 million with global institutions and family offices.
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The firm’s regional venture debt strategy comprises a Singapore-based variable capital company (VCC) for investments in Southeast Asia and a Category II alternative investment fund (AIF) for investments in India.

Lighthouse Canton, which will provide debt capital to tech-enabled companies in the region, targets raising US$100 million for this new fund.

For companies with sound business models and viable unit economics, venture debt is an alternative source of growth funding, which is gaining traction amongst regional startup companies now.
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In recent years, Asia’s startup ecosystem has witnessed a boom, attracting 38 per cent of all venture capital deal flows globally (source: State of Venture 2022 Report, CBInsights) last year. At the end of 2022, there were 1,205 unicorns globally, with 27 per cent hailing from Asian countries such as China, India, South Korea, Indonesia, and Singapore.

Also Read: What is venture debt financing? How can startups use it to their advantage?

The Indian startup ecosystem is the third largest in the world, only behind the US and China, with nearly 10 per cent of all global unicorns based in India — and is posed to grow further.
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“As the pace of venture capital activity continues to grow, it is logical that we would see a rise in venture debt demand,” said Sanket Sinha, Lighthouse Canton’s Global Head of Asset Management. “In more mature venture ecosystems such as the US and Europe, venture debt has risen to 15-20 per cent of the total VC funding, whereas this proportion is less than 2 per cent in India and Southeast Asia. Given the growth of the venture ecosystem in India, we see tremendous opportunity for venture debt, and we expect the size of this market to grow 3-4x in the next five years.”

Headquartered in Singapore, Lighthouse Canton is a global investment institution with wealth and asset management capabilities. It oversees over US$3 billion worth of assets under management and advisory (as of September 30, 2022).

The new debt fund is the second launched within one year focused on the venture ecosystem. Earlier this year, it partnered with Nueva Capital to launch its maiden venture capital fund, LC Nueva, focused on pre-series A and series A companies in India.

Lighthouse Canton also runs Founders’ Ecosystem, which helps startups and founders enhance performance and plan for their personal and business legacies at various stages in their life cycles. The initiative provides added value through other venture investments, business solutions, and personal wealth management services.

These solutions range from funding solutions for companies across the capital structure to pre- and post-monetisation funding needs. It also works closely with the founders and senior management on business structuring and personal wealth solutions.

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