HSBC Boosts India Startup Lending to $1 Billion

Mumbai, Oct 8 (PTI) Foreign lender HSBC on Thursday announced that it is upping its commitment of lending to the fledgling Indian startups ecosystem to USD 1 billion from the present USD 600 million.

The UK-headquartered lender, which has been actively lending in the world's third-largest startup ecosystem for over five years, formally launched its innovation banking vertical.

Its global head for the vertical, Dave Sabow said India joins select geographies such as US, Israel, China, Australia and UK where the innovation banking operates.

"We're seeing India's relevance as a global hub for innovation will get only amplified further in the years ahead so our ambition is to continue to invest in this business and be a part of India's continued economic transformation and ultimately to bring more sources of global capital into support what we think is one of the most exciting markets that we operate in," he added.

As per Sabow, the bank will lend to companies as early as ones having raised a Series A funding, and handhold them right up to their listing, and added that a lot of the thrust for the programme started after the acquisition of the troubled Silicon Valley Bank by HSBC, which is on the relationships with venture capital ecosystem.

The bank lends to even companies which may be burning cash, he said, adding that the interest rate charged is less expensive than a private credit fund.

At present, about 80 per cent of the USD 600 million in commitment, or approximately USD 500 million, has already been committed, the bank said, stressing that performance of the portfolio is quite satisfactory.

"I think the billion dollars is an interim step. In my view, the startup ecosystem is just going to become larger and larger and the need for capital is just going to get bigger," the head of banking for HSBC India, Ajay Sharma, said, declining to give medium term targets.