New Delhi: Alteria Capital Advisors LLP, a venture debt firm launched by former executives of InnoVen Capital, on Wednesday said it has raised Rs356 crore for its initial debt fund.
Alteria Capital, which began operations in October last year, is targeting a total corpus of Rs800 crore with a green shoe option of another Rs200 crore. It expects to raise the entire sum by the later half of this year.
There “is strong visibility for additional investment beyond the first close from a number of domestic and foreign investors and (the company) expects to achieve the final close in H2 2018," Alteria Capital said in a statement.
The initial commitments came from a large family office and several institutional investors, including private sector lender IndusInd Bank, the company said.
The money raised is intended to fund start-ups across seed and growth stages in consumer services, technology, healthcare, logistics and education technology.
The debt firm said it could invest up to Rs100 crore in a single deal and that at least two investments were in the pipeline.
Popular in the US and parts of South-East Asia, venture debt has become mainstream in India only over the last few years, with big start-ups such as Byju’s, Yatra.com, OYO and Swiggy, to name a few, raising crores in debt as against venture capital.
In 2017 alone, $81 million was invested in 30 venture debt deals in Indian companies, according to private capital tracker Venture Intelligence, Mint reported in January
Venture debt helps founders raise capital without selling their shareholding. The deals are structured largely as debt, but a small percentage of the investment, usually 15%, is equity. For this reason, venture debt deals happen alongside VC investments.
“The demand for venture debt has been steadily increasing as more entrepreneurs have experienced the product and it is applicable across various end-uses like working capital, capex, acquisition finance and other special situations," said Vinod Murali, co-founder and managing partner at Alteria Capital.
Mumbai-based Alteria Capital, a category II Alternative Investment Fund (AIFs), is the newest player in the venture debt market and competes with Temasek-backed InnoVen Capital, Trifecta Capital and IntelleGrow, among others.
It is promoted by Vinod Murali and Ajay Hattangdi. The two had set up SVB India Finance in 2008 which later became InnoVen Capital after the takeover by Temasek, Singapore’s sovereign wealth fund, and United Oversees Bank, in 2015.
Murali and Hattangdi left in August last year to launch Alteria Capital.