Hello friends! Axel from Gilion here.
There hasn’t been a shortage of news over the past few weeks. Private credit is getting some attention as the disruptive force that it is, VOI enters the debt with a first of its kind €50m bond issue for fleet expansion, and AI is going nuclear. Let’s dig in!
VOI takes on serious debt
Swedish e-mobility company VOI issued a 50mEUR bond. The bond priced at 6.75% over STIBOR, has a maturity of 4 years. It is issued under a 125EUR program, meaning that VOI has the possibility to issue an additional 75mEUR. The deal which is meant to raise funds for future fleet investments is a potential game changer in Sweden, where few scaleups outside of the green tech sector have issued debt before turning profitable.
Check out the news here: https://www.di.se/digital/voi-tar-in-568-miljoner-kronor-genom-obligation/
VOI, which last year had losses of 52mEUR may not look like the ideal candidate for a four year bond. I would, however, argue that the firm is perfectly suited for hybrid financing, using debt for predictable fleet expansions and equity for user acquisition and product development. At Gilion, and previous employers I have worked with quite a few similar investments. Without going into VOI in particular, a typical mobility company will have a rather steady profitable return in each established city, and actually sell a rather standardized service (renting an e-scooter in the case of VOI).
Where the real risk lies is in investing in opening up new cities and acquiring new users. Hence, financing new fleets for existing markets is a perfect use of debt if structured correctly, and can make equity go a lot longer, ensuring the ability to grow and succeed.
Hopefully we will see more similar deals shortly.
Private Credit + AI is the wave to raise all boats
At Gilion, we’re obviously riding the private credit wave, but some times it feels the finance world at large hasn’t realized how powerful the trend is. McKinsey’s latest report looks to change that. It highlights just how much potential there is, and it’s reshaping how the industry operates. Here’s a breakdown of the key trends:
Private Credit’s Explosive Growth: According to McKinsey, private credit assets reached nearly $2 trillion by the end of 2023, with the U.S. market alone having the potential to grow to $30 trillion. The sector is expanding beyond traditional direct lending, with new asset classes like infrastructure, jumbo mortgages, and commercial real estate increasingly moving into nonbank territory.
New Ecosystem Partnerships: As banks face regulatory pressure, McKinsey notes that partnerships between banks, insurers, asset managers, and other non-bank entities are on the rise. These collaborations are creating new “open architecture” models, where loan origination, distribution, and ownership are becoming more symbiotic across sectors.
Tech and Scale Are Critical: Larger players are gaining an edge through scale, while AI and machine learning are transforming underwriting, operations, and portfolio management. McKinsey emphasizes that tech will be a key driver of efficiency and growth as the private credit market continues to evolve.
From my perspective, this is a golden moment for anyone in fintech or finance. Non-bank lenders have significantly less constraints on their lending, offering massive opportunities for startups to leverage tech, innovate and fill new gaps in the market. That said, the whole industry has grown in a pretty beneficial financial environment, and all lending lives and dies by credit risk, so caution, smart partnerships and scaling tech wisely will be essential for long-term success.
AI is going nuclear
As the discussion of big AIs carbon footprint grows louder, big tech companies like Google, Microsoft, and Amazon are turning to nuclear power to keep up with the massive energy demands of AI and cloud computing. Google is teaming up with Kairos Power to bring small modular reactors online by 2030, Microsoft is reviving a reactor at Three Mile Island, and Amazon is jumping in with a $500 million nuclear investment through Dominion Energy.
As AI apps like ChatGPT explode in popularity, data centers are using huge amounts of electricity—set to double by 2026. Nuclear power offers a low-carbon, reliable solution, but it’s also controversial, with critics raising concerns about safety risks and high costs. Despite that, tech leaders believe nuclear is crucial for AI’s future.
With energy demands soaring and the need for cleaner solutions, it seems nuclear might be a necessary step—but maybe it needs to be paired with investments in safer, renewable options like wind or solar. How do you think tech companies should balance innovation with environmental responsibility?
One last thing before we go..
movingimage joins the Gilion Family
Last week, we welcomed yet another pioneer to our roster of borrowers. movingimage, a Berlin-based company who offers an all-in-one solution that empowers large enterprises to create value through video. From creation and streaming to hosting, distribution and analytics capabilities, movingimage offers a centralized, cloud-based video platform that enables businesses to manage all types of video content efficiently and securely.
The deal, sized at €1.5 million was the first Seasonal Credit we’ve announced. Unlike our growth loans, Seasonal Credits are meant at bridging funding gaps of up to a year, for companies with large swings in cash flow. We believe they are the perfect complement to our six year growth loans. Read the full announcement: HERE
Stay tuned as we continue to explore the ever-evolving landscape of technology and its financial ecosystem. And as always, do let us know if there’s anything you’d like for us to cover.
/Axel
