Mumbai: Venture debt provider Trifecta Capital is planning to raise a second debt fund, targeting a corpus of Rs500 crore and a green shoe option of Rs250 crore by the end of 2018, a senior executive said.

Trifecta expects the fund to hit its first close of Rs250 crore by the end of December.

“Our Fund II will be Rs750 crore. We will raise mostly from our existing investors. We will also have an offshore allocation. Out of the total fund size, $70-80 million will come from rupee equivalent investors, while $40 million will come from offshore investors. We will have offshore development finance institutions (DFIs), or foreign venture debt funds or limited partners of those venture debt funds," said Rahul Khanna, Trifecta co-founder and managing partner.

The fund will predominantly comprise institutional investors, complemented by a select set of large family offices and a couple of new domestic institutions, Khanna said, adding, “We may look at some corporate treasury allocation of listed companies also."

Trifecta Capital raised Rs500 crore in its maiden debt fund and aims to fully exhaust the fund by the next quarter.

“From our first fund, we have deployed Rs400 crore, out of which Rs100 crore has come through recycling while the remaining Rs300 crore has come through calling capital from the investors. We are well on track to recycle the money one more time," said Khanna.

Trifecta’s current portfolio comprises 30 companies, out of which some are leading brands such as online grocer BigBasket, logistics start-up Rivigo and furniture retailer Urban Ladder.

“Probably by next quarter, we will fully deploy our first fund. We would probably invest in 10 more companies out of our first fund. Out of our 30 companies, 15 have already had follow-on financing rounds since we lent debt to them," he said.

Trifecta Capital has hired Aakash Goel, former principal at Bessemer Venture Partners, as one of its partners.

Goel will work out of the firm’s Bengaluru office.

“Goel has got 15 years of experience. Our team comprises of people who already have lending and investing experience. This business of debt requires a right level of dialogue between the founders and investors," said Khanna.

Trifecta Capital’s team comprises seven investment professionals, including three partners.

“We are also planning to add two more associate-level people by end of the year. We have now opened offices at Bangalore and Mumbai as well," Khanna added.

The venture debt industry has seen significant traction in the recent years, resulting in several new firms entering the market.

Alteria Capital, started by Ajay Hattangdi and Vinod Murali, former executives of Temasek-backed Innoven Capital, is currently raising a Rs1,000 crore venture debt fund.

In November, Unicorn India Ventures, an early-stage venture capital fund, launched its maiden Rs600 crore venture debt fund.

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