Trifecta closes third India venture debt fund on $214m
Trifecta Capital has closed its third India venture debt fund with about INR 17.8bn (USD 214) in commitments. The initial target was INR 10bn with a greenshoe option of INR 5bn.
The fund reached a first close of INR 7.5bn in September 2021. The LP base has been described as featuring a significant increase in global financial institutions, along with domestic conglomerates, development finance institutions, and family offices.
The quantum of venture debt fundraising in India since 2021 more than doubles the amount raised in the prior eight years combined, according to AVCJ Research.
In 2021, five funds raised a record USD 490.2m, while four secured USD 382.2m in 2022. As recently as October, Alteria Capital reached a first close of INR 10bn on its third venture debt fund, observing that debt accounted for less than 5% of local start-up investments, versus 15% in the US.
About USD 333m has been raised in 2023 to date, including Trifecta’s latest, as well as a USD 100m first close on Stride Ventures’ third vintage, which has a target of USD 200m. In January, Ligthhouse Canton reached a first close of INR 1.5bn against an overall target of INR 11bn.
Trifecta was considered one of the early movers in Indian venture debt when it closed its first fund on INR 5bn in 2014 with support from RBL Bank and Small Industries Development Bank of India (SIDBI). Fund II closed on INR 10.2bn in 2021 with support from SIDBI.
Last year, Trifecta also closed its debut venture capital fund with INR 15bn in commitments. It targets local late-stage start-ups that are seeking liquidity events within three years, writing checks of INR 1bn-INR 2bn. Equity deals will be primarily sourced from the debt portfolio.
Trifecta co-founder Rahul Khanna told Livemint his firm aimed to launch its fourth debt fund in the first half of 2024 and a second growth equity fund the same year. He added that within Fund III, 40% of the portfolio had already received follow-on equity funding and that the average revenue growth rate is 60%.
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