DBS and Temasek on July 30 announced a joint agreement to launch ‘EvolutionX Debt Capital’, a $500 million debt financing platform for growth stage technology-enabled companies across Asia with a focus on India, Southeast Asia and China.
The company will be headquartered in Singapore, according to an official statement.
EvolutionX will provide “non-dilutive financing” and invest in opportunities arising from a growing digital economy in sectors such as consumer services, education, financial services, healthcare and industrial development, per the statement.
Tan Su Shan, Group Head of Institutional Banking at DBS said the development provides an opportunity for the bank to “play an integral role in nurturing and financing the growth of Asia’s future unicorns”.
Acknowledging the “pervasive impact” of technology and digitisation across sectors, Rohit Sipahimalani, Chief Investment Strategist at Temasek, said the move is a “purposeful use of our capital to create and catalyse solutions for gaps we see today, to stimulate innovation and growth for long term, sustainable value.”
“EvolutionX combines Temasek’s investment expertise and DBS’ global banking networks to leverage and further catalyse the fast growing technology ecosystem in Asia”, the partnership aims to “serve as a natural extension” for DBS’ and Temasek’s existing early-stage debt initiatives and investment activities, it added.
“As a purpose-driven bank, we believe in investing in solutions that democratise financing access to companies of all sizes and stages of development to give them the best opportunity to achieve their endeavours,” Shan added.
Shan noted that debt is “fast emerging as an alternative financing source” for high-growth tech companies that traditionally only raised capital through equity. He added that EvolutionX will also help founders avoid equity dilution in the early stages and serve as a “complementary tool” to tide over cash shortages and unexpected market and economic headwinds”.
Sipahimalani said the platform will provide companies and entrepreneurs the support they need as they continue to scale and expand with a “meaningful alternative” for funding.EvolutionX will be led by Joint Interim CEOs Amit Sinha (Group Head of Telecoms, Media and Technology, Institutional Banking Group at DBS) and Aftab Mathur (Director, Investment (Innovation) at Temasek), before a full-time CEO is appointed in the next few months.