A $250 million institutional fund has just launched in Australia targeting founders who want to grow without giving up equity.
What’s happening: Partners for Growth, a global private credit firm that has backed more than 85 Australian companies over 18 years, has launched a new A$250 million fund targeting later-stage Australian founders who want growth capital without giving up equity.
Why this matters: For growth-stage founders, the choice between equity and debt has historically defaulted to equity by habit rather than strategy. A well-capitalised private credit market changes that calculus, and the names already using it suggest this is not a niche instrument.
For most Australian founders, raising capital has meant one thing: finding investors willing to take a stake in the business. Equity has been the default, and dilution has been the accepted cost of growth. That default is starting to shift.
Partners for Growth, a global private credit firm with 22 years of experience and operations in Australia since 2007, has launched a new A$250 million fund targeting later-stage Australian founders who want flexible growth capital without giving up ownership. The first close was led by a significant commitment from a large Australian institutional investor, a signal that private credit as a growth financing tool is attracting serious institutional confidence.
For founders who have only ever thought about their next equity round, the timing is worth paying attention to.
The dilution problem
Every time a founder raises equity, they give up a portion of their business. In the early stages, that trade-off is often unavoidable. Capital is scarce, risk is high and investors need an ownership stake to justify the bet. But as a business matures and begins generating revenue, the calculus changes. The risk profile improves, assets accumulate and the business has more to offer a lender than it did at the start.
Yet many growth-stage founders continue reaching for equity by default, partly because that is what they know and partly because the private credit market in Australia has historically been less accessible to technology and innovation-led businesses.
Jason Georgatos, President of Partners for Growth, says that is changing. “Founders are becoming more deliberate in how they approach financing as their businesses scale,” Georgatos said. “Rather than relying solely on equity, many are incorporating structured private credit to support growth while preserving ownership and long-term strategic flexibility.”
What private credit actually offers
Private credit in this context means structured debt, capital that a business borrows and repays rather than exchanges for equity. The structures vary, ranging from term facilities and working capital lines of credit through to asset-backed lending and warehouse funding for fintechs and alternative lenders looking to scale their loan books.
The appeal for founders is straightforward. Growth capital arrives without dilution, ownership is preserved and strategic control stays with the founding team. For businesses at key inflection points, including entering new markets, scaling operations or funding a specific growth initiative, that flexibility can be more valuable than the alternative.
“This fund is designed to provide non-dilutive growth capital that works alongside venture capital and private equity, supporting disciplined execution at key inflection points,” Georgatos said.
The model is not a replacement for equity. It is designed to work alongside it, giving founders more options at each stage of growth rather than forcing a binary choice between raising a round or standing still.
Who is already using it
The approach is not theoretical. Partners for Growth has previously backed more than 85 Australian companies using structured private credit, including Employment Hero, Koala, Bridgit, Design.com and Skip Loans. The range of businesses on that list, spanning HR technology, direct-to-consumer, construction finance and e-commerce, suggests the instrument is applicable across sectors rather than limited to a narrow category of business model.
The broader private credit market is also maturing. Later-stage companies are increasingly utilising private credit alongside equity, a shift that reflects both the growing sophistication of Australian founders and the increasing availability of structured capital from firms with the expertise to deploy it into technology and innovation-led businesses.
The new PFG Income Fund, which has completed its first close and commenced deployments, is positioned to serve Australian and global technology-enabled businesses, fintechs and alternative lenders at the later stages of their growth journey.
What founders should ask
For growth-stage founders considering their next capital raise, the existence of a well-capitalised private credit market raises a set of questions worth working through before defaulting to equity.
How much of the business do you actually need to give up to fund the next stage of growth? If the capital requirement is tied to a specific initiative, a new market, a product build or scaling a loan book, structured debt may serve that purpose more efficiently than an equity round. If the business has assets, revenue or a maturing credit profile, the terms available from a private credit provider may be more favourable than founders expect.
The key trade-off is simple. Equity brings patient capital and often strategic support but comes at the cost of ownership. Debt preserves ownership but requires repayment and carries obligations that equity does not. Neither is universally better. The right answer depends on the stage of the business, the purpose of the capital and how the founder weighs control against flexibility.
What the launch of a $250 million fund backed by significant institutional capital does confirm is that for later-stage Australian founders, the private credit option is now well resourced, professionally structured and actively looking to deploy. For founders who have never seriously considered it, that is worth knowing.
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