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MUMBAI : Venture debt firm Trifecta Capital has raised 1,500 crore for its maiden equity fund and is now looking to raise another 375 crore by exercising a green shoe option to tap strong investor demand, said a senior executive.

The Trifecta Leaders Fund – I was launched in May 2021 during the pandemic’s second wave and made its first close in July. The fund is focused on investing in late-stage Indian tech startups.

The fund has so far invested a total of 730 crore in eight late-stage startups comprising Dailyhunt, Livspace, Cars24, Pristyn Care, ixigo, Good Glamm Group, API Holdings (Pharmeasy) and Meesho.

“We have built a highly diversified portfolio and the common trend across all of these is that most of these companies are category leaders. All of them have strong underlying long-term growth prospects. They have demonstrated solid unit economics; in many cases are profitable in certain lines of business and they are incredibly well-capitalized; just the cash on the balance sheets of these companies now is about 17,000 crore, which means that they can get through a good two years without having to raise any more capital," said Rahul Khanna, managing partner of Trifecta Capital.

He said that most of these companies are on a path to getting to a liquidity event.in the next 12-24 months and a couple could make a public listing fairly quickly.

Trifecta hopes to deploy the entire fund in 2022.

While the fund invests in crossover opportunities where companies are preparing for initial public offerings (IPOs), Khanna said it is not a pre-IPO focused fund. “This is not a pre-IPO fund, and I think now the difference will become much clearer between funds that were trying to arbitrage timing and funds like ours that had a fundamentally long-term view on a structural gap in late-stage venture capital," said Khanna.

Trifecta sees good opportunity for late-stage investments in 2022, especially post the recent sharp corrections in tech stocks in the US.

“Whatever we’re seeing in the markets, what’s played out in the US and some of that has played out in India too. So, 2022 could also be a very good vintage year for making new investments because some of the valuations would likely correct on new deals as well. Companies that do need capital will raise and hopefully valuations can be more attractive," he said.

Besides domestic investors, the fund has also seen interest from foreign investors who are keen to tap Indian tech companies that are likely to go public. About 15-20% of the fund corpus is likely to come from foreign investors, said Khanna.

On the domestic side, the fund has received commitments from several insurers and asset management companies as well as large family offices, he added.

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