OSK Ventures International Bhd and Affin Hwang Investment Bank Bhd have jointly launched Pothos Fund I, a dedicated venture debt fund designed to support high-growth companies across Southeast Asia. The three-year fund is managed by Pothos GP Sdn Bhd, a subsidiary of OSKVI with strategic equity participation from Affin Hwang Investment Bank. The initiative signals a broader shift in regional startup financing toward capital solutions that sit between traditional bank loans and venture capital.
A Vehicle for Maturing Startups
Pothos Fund I carries a three-year investment tenure and will focus on debt-equity hybrid financing for companies that have moved beyond the earliest stage of startup life. It will target businesses that already generate revenue and demonstrate proven models, stronger management teams and more predictable cash flows. This approach contrasts with traditional venture capital, which typically backs ideas that are still being tested.
The fund seeks to generate returns through contractual income streams, downside protection features and selective equity participation. For founders, venture debt can extend operational runway or finance expansion without forcing management teams to raise another equity round at an unfavourable valuation. For investors, the structure provides exposure to private technology companies with a different risk profile from conventional equity funds.
The launch also gives sophisticated investors in Malaysia access to an asset class that has historically been more common among large institutional investors. The product is intended to fill a gap for companies that are too mature for seed stage bets but not yet able to borrow easily from commercial banks. This middle layer of the market has become more visible as Southeast Asia's digital economy matures.
Why Venture Debt Is Gaining Relevance
Venture debt is a loan designed for venture-backed or high-growth companies that may not yet fit the credit models used by traditional banks. It is often paired with warrants or other equity-linked features, giving lenders some upside if the borrower performs well. In Southeast Asia, the model has become more relevant as startups and investors reassess the cost of capital.
The region's digital economy has produced more companies with recurring revenue, payment histories and expansion plans across multiple markets. At the same time, equity funding has become more selective after the global correction in technology valuations. That combination has pushed founders to become more capital efficient while still needing funds for working capital, product development, market expansion or acquisitions.
The Strategic Partnership Behind the Fund
The partnership combines OSKVI's venture investing background with Affin Hwang's capital markets and private markets structuring experience. OSKVI has invested in, supported and exited more than 50 technology and enterprise companies across Southeast Asia over the past two decades. That history matters in venture debt, where lenders must assess cash flow, investor backing, founder quality, sector dynamics and the likelihood of future capital raising.
Affin Hwang brings fundraising, distribution, private markets structuring and access to institutional and sophisticated investors. OSKVI chief executive officer Amelia Ong said venture debt provides a valuable option alongside traditional equity funding and helps build a more complete funding ecosystem. Affin Hwang Investment Bank chief executive officer Hanif Ghulam added that the partnership combines complementary strengths and deep market expertise to deliver an institutional-quality investment solution.
Pothos Fund I enters a regional market where venture debt is still underdeveloped compared with the United States or India but no longer empty. Players such as InnoVen Capital, Genesis Alternative Ventures and AFG Partners have helped familiarise founders and investors with less-dilutive growth capital. The new fund signals that Southeast Asia's financing stack is becoming more layered, offering founders greater choice while demanding more discipline from borrowers.