Alteria Capital closes maiden venture debt fund at Rs 960 crore

Homegrown venture debt firm Alteria Capital has marked the final close of its maiden fund at Rs 960 crore, making it the country’s largest venture debt firm, the company said in a statement. 

Founded in August 2017 by Ajay Hattangdi and Vinod Murali, who had earlier helmed InnoVen Capital, a Temasek subsidiary, Alteria Capital had initially set out to raise Rs 800 crore. However, the round was oversubscribed, largely by domestic investors.

Among others, Alteria’s maiden fund counts the likes of Sidbi, Indusland Bank, Azim Premji Foundation and Binny Bansal as investors. In fact, Sidbi wrote a Rs 157.5 crore cheque, which is its largest commitment to a single fund under its startup Fund of Funds programme. 

While an average cheque size from Alteria will be in the Rs 15 crore to Rs 20 crore range, the fund will also write outsized cheques of up to Rs 100 crore in some cases. For instance, Alteria invested about Rs 80 crore in Lendingkart in a single round in June. Since the first quarter of 2018, Alteria has committed Rs 615 crore to startups, of which Rs 540 crore has been deployed across 28 deals. It has backed Rebel Foods, Vogo, Toppr, RAW Pressary, Dunzo and Stanza Living, among others.

“Venture debt is now an integral part of funding rounds for startups across stages and sectors. Since we have the ability to recycle capital, we will end up deploying approximately Rs 1,800 crore from this fund. We are seeing a very strong pipeline of startups across technology, healthcare and consumer segments to absorb this capital over the next couple of years,” says Murali, managing partner at the firm.

Alteria also wants to become much more than a source of money for startups. The fund has launched an ‘Activate’ platform that helps connect startups, mostly its portfolio companies, with corporates, investors or other startups. Such connections, claims the fund, could unlock business or investment opportunities. The fund claims to have made more than 100 such connections so far.

“At Alteria Capital, we are borrowing from our experience of over a decade in building the venture debt business to reinvent the model,” says Hattangdi, managing partner at the firm. “Alteria Capital will extend its engagement strategy beyond capital access to include ongoing business support to portfolio companies through Activate.”

Venture debt has gained currency among entrepreneurs as equity funding has become hard to get. Apart from Alteria, another homegrown venture debt firm, Trifecta Capital, is also raising a new fund.