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颁补苍补诲补鈥檚 听has raised $40 million of a planned $100 million fund that will provide debt financing to mid-to-later stage startups in North America.

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The Vancouver, British Columbia,-based firm鈥檚 first two funds raised a combined $70 million and made loans to 10 companies, according to Founder and Managing Partner .

鈥淭here is a rapidly increasing number of mid-to-later stage tech companies looking for additional forms of capital to fuel growth beyond traditional sources,鈥� said Garg. 鈥淪ince inception, Vistara has worked with both founder-owned and venture-backed tech companies across North America to help them achieve their growth objectives. With this fund, we are aiming to further grow our capabilities.鈥�

Vistara plans to invest between $5 million and $15 million per company in senior or subordinated debt 1. Garg estimates the fund will provide loans to about 10 companies out of its latest fund.

Its听model is fairly straightforward: Vistara provides a loan at a term of three to five years. The company pays back interest only throughout the duration of the loan and then repays the loan amount in full by the end of the term. Typically, Vistara takes some warrants in the company, which Garg said is 鈥渇ar less dilutive鈥� than taking equity.

The 鈥渉ighly flexible鈥� form of financing is appealing to companies who don鈥檛 want to give up equity, Garg said. Vistara鈥攚hich is Sanskrit for expansion鈥攆ills 鈥渁 big gap鈥� in capital structure between banks and equity financing for companies, according to Garg.

鈥淐ompanies don鈥檛 have to give up further control, reset their valuation or dilute founders鈥� and existing shareholders鈥� equity stakes,鈥� he added. 鈥淚t can help companies that say, are between Series B and Series C rounds. Our capital can help them extend their runway during important growth phases. And, we actually find it enables greater access to capital from banks.鈥�

Friendly Debt

Vistara Capital Partner鈥檚 LPs include a number of prominent family offices, foundations, and over two dozen current or former technology company executives. The previous two funds saw a number of successful exits, zero loan losses, and strong consistent returns for investors, according to Vistara.

For example, in 2016, Vistara provided peer-to-peer ridesharing company with a $7 million interest-only term loan which allowed the San Francisco-based company to meet important milestones ahead of its , according to Garg. Vistara’s initial note was refinanced as part of Getaround’s most recent $300 million听 led by , and Vistara continues to serve as a partner to the company.

鈥淲hen Getaround was looking to extend our runway and execute several key initiatives prior to our next equity raise, Vistara stepped up,鈥� said , CFO of Getaround, in a written statement. 鈥淰istara put together a financing solution tailored to our needs and moved quickly to close. This was vital to a company like ours, working in a fast-moving sector. We were able to get back to running the business and prioritizing the factors most important to Getaround’s long-term growth.鈥�

As part of the new fund, Vistara also will be opening a new Toronto office. Historically, venture debt has been more popular in the U.S. than in Canada, Garg noted.

鈥淲e would love to place at least half of the new US$100M fund in Canada to help mid to later stage Canadian tech companies further scale and become true champions as opposed to stalling out or selling too early,鈥� he said.

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