(Bloomberg) -- Genesis Alternative Ventures, a private lender to ventures and growth-stage companies, closed its second debt fund at the lower end of its target as global investors remain cautious about Southeast Asia’s startup industry.

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The Singapore-based firm raised $125 million for the fund to finance young companies across Southeast Asia, securing new investors including Japan’s Mizuho Bank and Israel’s OurCrowd Ltd. The fund had sought $120 million to $180 million, and took more than two years to reach the close.

Venture lending, or loans offered to startups, has attracted growing interest in recent quarters as companies tap the debt market instead of raising equity. A cloudy global economic outlook has battered tech companies’ valuations, and venture firms have been struggling to raise capital amid a depressed market for initial public offerings. Still, Southeast Asia remains a challenging market for raising both debt and equity, as many of its still-unprofitable startups are deemed high-risk by the world’s venture investors.

“It’s never easy to raise funds, and it’s been more difficult in this environment,” Jeremy Loh, co-founder and managing partner of Genesis, said in an interview. “This is a period of time where founders must be able to demonstrate that they can grow at a sustainable pace without relying on too much equity.”

More than 80% of the investors in Genesis’s first fund — such as Aozora Bank Ltd., Korea Development Bank and Silverhorn Group — also invested in its newest fund.

The second fund has already lent more than $20 million to nine startups including Aonic, Eezee Pte and Akulaku Inc., Loh said. Genesis extends debt to startups that don’t typically qualify for regular bank loans because they lack collateral or haven’t yet reached profitability. The company’s first $90 million fund has financed 25 startups from Series A to pre-IPO in Southeast Asia. Its portfolio companies include Jakarta-based online lender Akulaku and buy now, pay later startup Pace.

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