Banks develop a taste for venture capital after Sidbi backed new VC firms

Alteria Capital, the venture debt fund floated by Hattangdi and his former colleague Vinod Murali, has roped in a public sector bank and a private bank

Raising a new fund from domestic investors has never been easier. Institutional investors — led by banks, insurance firms, family offices and Small Industries Development Bank of India (Sidbi) — are backing new venture capital and venture debt funds.

If 2017 saw many new venture capital (VC) funds backed by the government’s Fund of Funds for Start-ups being managed by Sidbi, 2018 is seeing a flurry of venture debt funds, backed by banks, insurance firms and family offices.

“Banks are investing in funds and it’s a big thing,” says Ajay Hattangdi, former head of India’s largest venture debt provider Innoven Capital. There’s