Mumbai: DBS Bank India has earmarked $250 million (about ₹2,000 crore) to lend to new-age startups as improved operating metrics and a sharper focus on profitability have enhanced the broader view on the sector facing a prolonged funding winter.
“It’s not a bad time to think about support to startups because several of them have got stress-tested and they’ve not raised that much equity. There is also a fresh look at becoming more productive, more profitable and to see the difference between what is essential and what is not,” Rajat Verma, head-institutional banking at DBS Bank India, told ET.
DBS Bank is considering several startups including in healthcare, technology, and firms using Artificial intelligence (AI) in financial services such as insurance; transportation, logistics and retail, waste management companies and supply chain logistics spaces, Verma said.
The foreign lender aims to tap its large corporate banking network to provide products such as escrows, foreign exchange and cash management coupled with advanced digital solutions, trade financing, structuring, advising, sustainability as well as regulatory reporting to Indian startups.
“I could tell you more broadly the type of companies that we’ll be working with – platforms who are lending into say this sector; it could be a non-bank finance company which is lending into new-age (sectors). We could be working with companies who are in the mobility segment; there are several of them who we’ll look to support. We see a massive clean-tech movement in mobility,” he said.
DBS Bank will use a comprehensive evaluation process to provide specific banking solutions to the startup sector, which has encountered “unique hurdles” in the digital economy.
Elaborating on risk management, Verma said it was important to bear in mind that the bank would not play the role of an equity provider while being less conventional about how it approaches credit to the startup space.
