Private equity giant Blackstone is gearing up to make its first major push into lending to startups and technology companies—joining a corner of the debt market that’s quickly heating up.
The firm expects to invest at least $2 billion in technology debt deals over the next few years, including venture debt, deals with pre–initial public offering startups and deals with startups that have recently gone public, Viral Patel, global head of technology investing for the firm’s $230 billion credit arm, told The Information.
Lenders are hoping tech firms will increasingly seek out debt financing or a mix of equity and debt—in part to avoid raising fresh venture capital funding at sharply lower valuations, and also because the volatile stock market has halted IPOs. Blackstone’s new effort to provide tech companies with alternative financing means it will be competing with specialized venture lenders such as Hercules Capital, structured equity funds being raised by firms such as Coatue Management, as well as other big investment firms like Silver Lake.
