Alteria announces first close of third venture debt fund at Rs 1,000 cr

The firm now has an AUM of Rs 3,800 crore across its three debt funds, raised from domestic investors

Alteria Capital has announced the first close of its third venture debt fund at Rs 1,000 crore, with a greenshoe of Rs 1,000 crore. The firm now has an AUM (Assets Under Management) of Rs 3,800 crore across its three debt funds, raised from domestic investors.

The third venture debt fund “Alteria Capital Fund 3 Scheme A”, promoted by veterans Ajay Hattangdi and Vinod Murali, will continue to back start-ups that have already raised VC funding, and provide them with a range of specialty debt solutions.

Further, the fund will target Indian start-ups across early and growth stages with cheque sizes up to Rs 150 crore. In addition, there will be a separate scheme within this fund to provide working capital solutions to start-ups.

“This is our third fund in five years which signals the strong momentum in the venture debt industry as a growing asset class in India. Consistent, stable returns over the years with strong credit risk performance as well as upside potential from equity kickers has proven to be a healthy combination for investors,” said Vinod Murli, co-founder and Managing Partner at Alteria Capital.

“We are grateful to our LPs who continue to repose their trust in us and excited to back more founders as they contribute to India’s growth,” he added.

Despite macroeconomic volatility, there has been strong interest from domestic investors to participate in this asset class, including institutions as well as large family offices, senior professionals, founders and other stakeholders from the start-up ecosystem, the firm said in a statement.

“For the venture debt asset class, India is a relatively younger market compared to its global peers which reflects a significant opportunity for raising and deploying capital. With the third fund, we hope to play a meaningful role in bridging this gap over the next few years. We are extremely thankful to all the founders who have chosen us to be a part of their capital journey and optimising their ownership by reducing dilution,” said Punit Shah, Managing Partner at Alteria Capital.

The company’s first fund closed at Rs 960 crore in 2018, while the second fund closed at Rs 1,820 crore last year. Capital from the previous funds have been completely deployed.

“While we have drawn down 100 per cent of our second fund, we will still do deals from that fund for the next four to six quarters. For every fund, we do 1.6-1.7x of that capital raised as total transactions,” Murli revealed.

“As a team, we have witnessed the venture debt asset class grow more than 20x in the last ten years across multiple cycles and we feel humbled to have played a meaningful role in its evolution. We are grateful to all our investors and founders who continue to trust us in channelising large pools of domestic capital towards fuelling disruptive start-ups in our country,” said Ankit Agarwal, Managing Partner at Alteria Capital.

The firm, which received approvals from Sebi in Q2 of 2022 for its third venture debt fund, claims to be sector agnostic, funding start-ups across all sectors.

Alteria has multi-cycle experience having funded more than 250 start-ups over the last 15 years. The firm has over 100 portfolio companies including Dealshare, Good Glamm Group, Infra.market, BharatPe, Dunzo, Cars24, EarlySalary, Zepto, Portea, Toppr, Stanza, Zest Money, Chaayos, LBB, Country Delight, and Wow Sciences, among others, the statement said.