HSBC has raised its lending commitment to Indian startups to $1 billion, up from $600 million, the bank announced on Thursday.
The UK-headquartered lender said the expanded facility reflects its growing focus on India’s innovation economy, which it has been financing for more than five years. About $500 million of the earlier $600 million allocation has already been committed, HSBC added.
The announcement coincided with the formal launch of the bank’s innovation banking vertical in India, joining markets such as the United States, Israel, China, Australia and the UK where the business operates.
Dave Sabow, HSBC’s global head for innovation banking, said India’s position as a global hub for technology and entrepreneurship would strengthen in the years ahead. “Our ambition is to continue to invest in this business and be a part of India’s continued economic transformation and ultimately to bring more sources of global capital into support what we think is one of the most exciting markets that we operate in,” Sabow said, according to PTI.
He added that the bank’s strategy was influenced by its acquisition of Silicon Valley Bank’s UK arm in 2023, which deepened its ties with the venture capital ecosystem.
HSBC said it plans to provide financing from the Series A stage through to initial public offerings. Sabow noted that the bank lends even to companies that are not yet profitable, with pricing more competitive than private credit funds.
Ajay Sharma, head of banking for HSBC India, described the new $1 billion commitment as an “interim step.” He said the requirement for capital in India’s startup ecosystem will continue to grow as the sector expands, but declined to provide medium-term targets.
The bank said its startup lending book has performed satisfactorily to date, with strong repayment and portfolio quality despite many companies still in growth or cash-burning phases. HSBC emphasised that the Indian ecosystem’s scale and diversity justified a deeper capital allocation.
India is the world’s third-largest startup ecosystem after the US and China, according to industry data. Global lenders and private funds have increased their presence in the market in recent years, targeting companies seeking non-equity financing options alongside venture capital.
HSBC said its lending model is intended to complement, rather than replace, equity fundraising by providing credit through different stages of the growth cycle.