India's Trifecta secures RBL as anchor, raises target to $64m

The vehicle was launched late last year with a target of INR3 billion. Registered as a Category II alternative investment fund (AIF) - a classification typically used for private equity funds - the vehicle is the first of its kind in India.

Trifecta is following the lead of the likes of venture lender Silicon Valley Bank (SVB), which was active in the country from 2008 until its sold its India unit to Singapore's Temasek Holdings in January. However, Trifecta will target start-ups at a slightly earlier stage than SVB, typically backing those in the market for their first institutional round of equity funding.

The fund will commit INR50-150 million per loan at a 16-18% interest rate, seeking a gross IRR of 17%. Khanna said demand has been better than expected with around INR2 billion raised so far. A first close - representing half the corpus - has been penciled in for the end of April.

"If we are able to reach our $65 million target, it effectively means that over a 5-6 year period we will be lending twice that amount," Khanna told AVCJ. "We get to recycle our debt at least one more time, so effectively the corpus we can deploy over the life of the fund is about $130 million."

The firm is keeping the final close date open-ended after Indian Finance Minister Arun Jaitley proposed allowing foreign investment in Category II AIFs, during his budget speech last month.

"In the past couple of weeks following the budget we have had significant inbound interest, this is also partly because of Temasek acquiring SVB in India which has shone some light on the opportunity," said Khanna. "We are just waiting to get some more clarity from regulators on how we can bring foreign capital in."

Venture debt is still fairly nascent in India but it is gaining popularity among start-ups that need capital to cover short-term expenses but are unable to secure tradional sources of debt, and are unwilling to give up equity.

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Venture
• Fundraising
• Financing
• Fundraising
• India
• Venture
• Structured finance