Growth Debt
15 July 2024
2 minute read
This post is the last in our series detailing our current investment strategies. We posted at length about the benefits we see in being a multi-strategy firm and we previously posted on both our primary and secondary equity strategies.
This post covers the newest area of our business which is the provision of debt capital to growth businesses, initially through the Salica Investments Venture Debt Fund.
The Salica Investments Venture Debt Fund
A complementary, non-dilutive funding source for high-growth companies and IP-rich businesses.
The Salica Venture Debt Fund was founded to provide non-dilution loan capital to a diversified portfolio of venture and late venture-stage UK and European technology and IP-rich businesses. Companies can be, and usually are, loss-making and will be seeking additional capital to help finance their continued growth.
The primary focus of the fund is on two core groups of companies:
- Software companies developing the software infrastructure, applications and services that drive productivity improvements, revenue opportunities, operational change and cost reduction for enterprise and intellectual property-rich companies.
- Patented hardware and advanced manufacturing companies that have developed strong IP, usually in the form of patents or patents pending. Mostly, the IP will be in relation to hardware or advanced manufacturing products, including medical devices and ESG-related products such as energy management and environmental technologies.
We look for established and well-run companies led by innovative thinkers and resilient leaders, who have already demonstrated their ability to scale their companies. We seek to lend to companies which are using new technologies and/or which have developed innovative, and often patentable, products or solutions to create leading businesses in their field.
We believe that the venture debt market is poised for continued growth as companies and equity investors familiarise themselves with the asset class and the benefits it can provide to companies and existing shareholders. With early-stage technology companies finding equity investment harder to come by and more expensive, we see a significant opportunity to provide debt funding to UK and European technology and patented hardware companies which are in their scale-up phase. This, combined with the depth of technology innovation in the UK and Europe, gives us considerable optimism that the asset class will continue to grow and evolve.
With a long-standing, market-leading team with more than 80 venture debt transactions completed, Salica is well-positioned to capture this opportunity.
