World Bank Group's IFC dips its toes in Indian venture debt, invests $25 million in Trifecta’s fourth fund
The group’s first investment in a pure-play venture debt fund in India, through the International Financial Corporation, is expected to help the country attract more funding from institutional investors and expand capital requirements for venture debt providers.
Trifecta Capital has raised $25 million from International Financial Corporation (IFC), a part of the World Bank Group, for its fourth venture debt fund, a top executive at the firm said. This marks the IFC's first investment in a pure-play venture debt fund in India. IFC’s investment is expected to help India attract more funding from institutional investors and expand capital requirements for venture debt providers.
“Providing more funding options to innovative startups, including flexible, cost-effective mechanisms such as venture debt, is essential for India’s economic growth and job creation," said Farid Fezoua, IFC global director for disruptive technologies, services and funds. “Our investment in Trifecta Capital is in line with our IFC 2030 strategy to mobilise private capital at scale and drive digital innovation and private-sector-led development that delivers more jobs," he added.
IFC is one of the largest global development institutions focused on the private sector in emerging markets, and operates in more than 100 countries. In FY25, the investment firm invested a record $71.7 billion in private companies and financial institutions in developing countries, including India.
Earlier this year IFC invested in the shorter duration scheme of Alteria Capital, another India-focused venture debt platform, which will focus on short-term liquidity needs to drive balance-sheet efficiency, such as short-term capital needs of licensed fintech companies, consumer brands, and electric vehicle manufacturers, among others.
Why venture debt is on the rise
Venture debt funds usually base their investment decisions on a company’s ability or likelihood to raise another round of equity financing, and other factors such as overall financial health and cash flows. It allows startups to use their equity capital for growth initiatives, and can also help companies extend their financial runway and aim for a higher valuation.
Venture debt is particularly useful for companies at the Series B stage and beyond that have achieved product-market fit and are generating revenue, as they often wish to minimise incremental dilution for existing shareholders while still securing capital to scale operations.
‘Plenty of dry power’
Trifecta has deployed nearly ₹1,000 crore in Indian startups from its third and fourth funds since the start of the fiscal year. “We’ve been actively investing from our fourth venture debt fund as well as recycling capital from the third fund. We have a lot of dry powder to work with as the majority of our latest fund has already been raised," the investment firm’s managing partner Rahul Khanna told Mint in an interview.
He added that Trifecta deployed about ₹550 crore in the first quarter of FY26, and more than ₹400 crore in the subsequent three months across both its funds. Trifecta’s fourth fund is about ₹2,000 crore in size, including a greenshoe option of ₹500 crore, and has seen participation from new and existing investors.
Trifecta's latest fund will target high-impact sectors including the electric vehicle ecosystem and financial services, as well as R&D-led deep technology sectors such as climate tech, AI infrastructure, manufacturing tech, and agri tech, while expanding access to the consumer, education, and healthcare segments.
Where Trifecta invests
Its first three funds were ₹500 crore, ₹1,024 crore, and ₹1,777 crore in size. Trifecta's investor mix typically includes insurance companies, family offices and large Japanese, American and European institutions. The firm has deployed about ₹8,700 crore across these three funds, investing in 220 startups. Its portfolio includes companies such as Atomberg, BigBasket, BlueStone, Country Delight, Cars24, Cashfree and Rebel Foods.
Historically, Trifecta’s venture debt funds typically target companies at the series A or B stage and beyond that are looking to scale rapidly. The firm’s ticket sizes have gradually increased over the years. They now range from ₹20 crore to about ₹200 crore across various tranches, depending on the needs and the stage of the company.
Khanna said, “The Indian market appreciates the operating leverage and scalability that high-growth companies have today. As a result, debt is incrementally playing a bigger part of the financing solution as companies require funds for working capital, inventory, logistics, acquisitions and asset creation. It is also a sign of an evolving and maturing asset class as people understand the role of venture debt in a company’s journey."
Founded in 2015 by Khanna and Nilesh Kothari, Trifecta aims to provide an alternative form of non-dilutive financing to help founders scale their businesses while retaining more control and ownership. In 2021, Trifecta launched its first-ever ₹1,500 crore growth equity fund to invest in about a dozen late-stage startups including Ixigo, Cars24, and Good Glamm Group.
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