Mumbai: RBL Bank on Thursday announced that it would be the anchor investor in Trifecta Capital’s venture debt fund, the first alternative investment fund (AIF) of its kind in India, with a commitment of 50 crore, the bank said in a statement.

“This move provides RBL Bank the opportunity to support the emerging venture debt market in India," it said.

Structured as a Category II AIF, the fund will focus on providing structured debt to high growth start-ups that have raised Series A or B rounds of equity funding. The fund plans to deploy around 125-150 crore per annum, the release said.

Trifecta Capital has been founded by Rahul Khanna, previously a managing director at venture capital (VC) firm Canaan Partners and Nilesh Kothari, previously a managing director at Accenture.

“Given the unique risk-reward profile of this asset class, Trifecta Capital has been able to attract RBL Bank as well as several other reputed Institutional Investors and large Family Offices into the Fund. We continue to see significant interest in the Fund and have therefore taken our target Fund size up from 300 crore to 400 crore," said Nilesh Kothari, co-founder of Trifecta Capital.

The Indian venture capital ecosystem has grown significantly in the last decade and in 2014, VC funds invested $2.1 billion, an increase of 47.7% from 2013 when VC funds invested $1.4 billion, according to data compiled by VCCEdge, the financial research arm of VCCircle.com.

While the venture debt asset class is relatively new in India, it’s a significant component of the venture capital ecosystem in US as well as Europe, comprising 10-15% of all venture capital deployed on an annual basis.

Other companies in the venture debt space are Silicon Valley Bank India Finance Pvt. Ltd and IntelleGrow Finance Pvt Ltd.

In January, Silicon Valley Bank, a non-banking financial company, which has been involved in the business of venture debt in India since 2009, was acquired by the Singapore government’s investment arm Temasek Holdings Pvt. Ltd. Silicon Valley Bank has a loan book of almost $100 million and has lent to around 75 start-ups.

Close