Venture debt is becoming increasingly popular with high-growth technology companies globally in recent years. While the asset class is highly developed in the U.S., the venture lending market is in its infancy in the U.K.
Betting big on the untapped potential, UK-based alternative investment fund manager Shard Credit Partners has unveiled its maiden tech-focused £75 million venture debt fund. The fund will make investments in senior secured loans with equity warrants to VC-backed businesses in the SaaS and fintech sectors in the U.K.
The fund will target borrowers with annual recurring revenues of at least £2 million, that are finding it increasingly difficult to source long-term financing from traditional lenders. Typical loan sizes will range between £2-6 million per borrower, with maturities of up to five years. It will complete around 15 investments per annum during the three-year investment period.
According to the company, the fund has already completed two investments with total commitments of £6.5 million ahead of first close. This included the fund’s first exit in December 2021, PassFort.
William Chappel, head of venture debt for Shard Credit Partners, said: “We will continue to support fast-growth businesses across the software as a service and fintech sectors. We aim to become the ‘go-to’ debt provider for venture capital-backed high growth technology businesses in the U.K.”
Alastair Brown, CEO of Shard Credit Partners concluded: “The launch of our inaugural UK technology venture debt fund, just one year after launching this unique strategy, cements our position as a specialist private credit manager in the U.K. and continental European direct lending marketplace.”