Wednesday, 2023 September 27

Venture debt fund Trifecta Capital closes second fund with USD 140 million

Institutional fund slated to invest in India’s technology startups continues to flow in the world’s third-largest startup ecosystem.

Venture debt firm Trifecta Capital said Friday it has closed its second fund launched in 2019, at USD 140 million, recording a slight oversubscription from its initial target of USD 137 million. Trifecta Capital had raised USD 103 million in March last year for the Fund-II.

The company has already invested INR 900 crores (USD 123 million) across 38 companies from its second fund. It had raised USD 68 million in its first fund in 2015, of which it has returned 75% to its investors that include banks, insurance companies, offshore, as well as some of India’s largest family offices, among other institutions. It said, by June 2021, it will most likely return 100% to investors.

“We have been deploying from this fund since 2019 and will be fully drawn by this year-end. We focus on tech companies that are leaders in their respective categories like healthtech, mobility, edtech, online grocery, and e-commerce,” Rahul Khanna, managing partner, Trifecta Capital, told KrASIA.

Trifecta Capital’s portfolio companies include e-grocerer BigBasket, medtech platform Pharmeasy, edtech major Vedantu, and social media company ShareChat, among others. Nine of its portfolio companies, it said, have become unicorns and several others are likely to achieve a billion-dollar valuation in the next 12 months.


Read this: Venture debt may soon go mainstream in India: Q&A with Stride Ventures

“Successfully closing Fund-II during these challenging times is evidence of the performance of our funds and the maturity of the asset class which we pioneered in 2014,” he said.

Venture debt funds invest in Series B and beyond companies along with venture capital firms and have a cyclical nature of capital deployment, thus allowing them to invest more than the actual fundraising.

“With a provision to recycle capital, we will have an investible corpus of up to INR 2,560 crores (USD 350 million),” the company said.

Other venture debt funds in India include InnoVen Capital, Alteria Capital, Unicorn India Ventures, Stride Ventures, among a few others. Earlier this month, Unicorn India Ventures said it has raised INR 90 crore (USD 12.33 million) for its second fund. It is looking to raise a further INR 400 crore in the next 12 months.

“Venture debt funds work best when the venture capital industry reaches a certain level of maturity. We think India’s venture capital and startup ecosystem have reached that mark where we have a bunch of deep-pocketed investors and a good number of growth-stage companies,” Khanna said.


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