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India's Trifecta reaches $30m first close on venture debt fund

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Trifecta Capital, the venture debt firm set up by former Canaan Partners Managing Director Rahul Khanna, has reached a first close of INR2 billion ($30 million) on its debut fund.

Trifecta Venture Debt Fund I, which has a target of INR5 billion, is expected to reach a final close within nine months, according to Livemint. The firm plans to begin investing out of the fund soon.

Trifecta's fund is the first debt fund to be registered under India's Alternative Investment Funds (AIF) regulations as a Category II AIF. The firm is one of several operating in India's small but growing venture debt sector, along with IntelleGrow, Capital Float, and SVB India (now InnoVan Capital India following its acquisition by Temasek).

Indian entrepreneurs are increasingly attracted to venture debt because it offers a way to cover short-term expenses without giving up equity, and can be easier to gain access to than other sources of debt.

Unlike some of its competitors, Trifecta will operate on a fund structure, rather than as a non-banking finance company (NBFC). The firm will target start-ups that are seeking their first round of institutional funding, with typical commitments expected to fall between INR50-150 million.

RBL Bank was announced as an anchor investor in the fund earlier this year, with a commitment of INR500 million.

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