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Stride Ventures, one of the leading venture debt firms in India, has raised $100 million as the first close of its third debt fund, reaching halfway towards its targets of over $200 million.

The first close was achieved within four months of receiving the licence for the third fund, the firm said in a release.

Founded in 2019, Stride Ventures has already raised two funds and it made the final close of its second fund of $200 million in August 2022.

According to the venture debt firm, the third fund received backing from a mix of institutional investors, including banks, insurance companies, and family offices. Its investment focus will be on fast-growing startups with robust business models, strong unit economics, and skilled management teams.

“Stride takes immense pride in being the largest contributor of credit to new age businesses that has sanctioned over Rs 5,000 crore in the Indian startup ecosystem,” said Stride Ventures Founder and Managing Partner Ishpreet Gandhi.

Venture debt has become an increasingly popular route for startup founders to raise capital given the present environment of funding winter. This helps startups raise alternative forms of capital while also keeping their valuation intact.

Stride Ventures believes the Indian venture debt market is expected to reach an annual deployment of $3 billion to $4 billion by 2025. Startups in its portfolio include SUGAR Cosmetics, The Good Glamm Group, Mensa Brands, Exotel, Yubi, and MoneyView, among others.

“We see a growing demand for venture debt as startups look to optimise their capital structure and preserve equity for future rounds,” said Apoorva Sharma, Managing Partner at Stride Ventures. “With the launch of our third fund, we’re well-positioned to meet the unique debt requirements and global ambitions of Indian startups.”

Stride Ventures claimed it has successfully distributed over 100% of its commitments, which included coupon payouts and principal redemptions, to the early investors of its Fund 1.