Singapore-based venture debt firm Mars Growth Capital is launching two new debt funds that will provide financing to Japanese and European startups, according to an announcement.
Mars Japan Fund, which will have a maximum size of 20 billion yen (about $148 million), will provide growth financing to promising pre-unicorns and unicorns in Japan.
“The newly established Mars Japan Fund will utilise the knowledge of both MUFG Bank and Liquidity Capital and leverage the expertise of Mars Growth Capital to provide growth financing to promising pre-unicorns and unicorns in Japan,” according to the announcement.
The other vehicle, Mars Europe Fund, will have up to $250 million to invest in European tech startups that address various social issues such as climate change, per the announcement.
Since its inception in 2021, Mars Growth Capital has leveraged MUFG Bank’s global network and debt financing expertise and Liquidity Capital’s AI technology to provide unique loans, which avoid diluting equity, to overseas startups.
Liquidity Capital is an Israeli fintech company.
“The importance of nurturing innovative startups is growing every year to adapt to the fast-changing environment, solve social issues and achieve sustainable growth of the Japanese economy,” Mars Growth Capital said.
To support the healthy and accelerated growth of those startups, the venture debt firm said further diversification and activation of the funding market are essential.
Mars Growth Capital currently utilises an AI-based credit model developed by Israel-based Liquidity Capital to analyse and finetune deal flow. This “hybrid model” comprises a mix of AI and on-hand human expertise, enabling Mars Growth to accelerate its decision-making processes.
Last month, the firm upsized its funds through a fresh capital injection from its single limited partner, MUFG.
MUFG has put $50 million into Mars Growth’s early-stage fund and $200 million into its growth-stage or “unicorn” fund. This brings the total funds raised by both vehicles to $250 million and $500 million respectively, as of the beginning of this year.
The firm focuses on venture debt, which is still an emerging asset class in Southeast Asia and India. Some active venture debt players in the region include Temasek and DBS-backed EvolutionX, InnoVen Capital, Genesis Alternative Ventures, Abound Capital as well as India-focused Alteria Capital and Trifecta Capital.