Why investors like Sachin Bansal are putting their money on venture debt

Besides diversification, venture debt offers net pre-tax returns 16%-17%.

When Sachin Bansal, the co-founder of Flipkart who sold his stake for $1 billion while leaving the company, wrote a Rs 20-crore cheque to Delhi-based start-up Milkbasket recently, it was his fifth debt deal in less than a year. Bansal has also extended $3 million each to scooter sharing start-up Vogo and Bounce.

He has also lent Rs 250 crore each to non-banking financial companies (NBFCs) Altico Capital and IndoStar Capital. Experts see these investments as traditional high yield debt deals and not as venture debt.

Like many HNIs, Bansal has been investing in the equity of start-ups. While equity offers higher