Alteria Capital announces first close of its second fund at Rs 1,800 crore

Alteria Capital has announced the final close of its second fund at Rs 1,800 crore, the largest venture debt fund to be raised in India so far.

This comes on the back of the fund’s first close in April at Rs 1,325 crore.

The second fund includes a target corpus of Rs 1,000 crore and a green shoe option of Rs 800 crore, said Vinod Murali, founder and managing partner of Alteria Capital.

The fund is looking to back more startups through its debt solutions, Murali said.

Alteria Capital now has assets under management of Rs 2,500 crore, across two venture debt funds, making it the largest venture debt provider in India currently.

The investor mix includes domestic institutions, large family offices as well as senior corporate professionals and venture capitalists/founders from the startup ecosystem.

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According to Murali, around 300 limited partners (LPs, investors in such funds) have brought in capital, with existing fund-I investors chipping in half the corpus.

“This is probably the first time when successful startup founders who have seen liquidity events in the past have also participated in a venture debt fund, apart from domestic institutional investors, large family offices and venture capital funds,” Murali told ET.

The fund, promoted by Ajay Hattangdi and Murali, will use the capital to back startups that have already raised VC funding and provide them with a range of specialty debt solutions.

The fund will target startups across early and growth stages with cheque sizes of Rs 150-Rs 200 crore.

“We are looking at offering structured and syndicated debt solutions to the companies, all under the same umbrella,” Murali said.

With its ability to recycle capital, Alteria will effectively have over Rs 4,000 crore available for funding start-ups across venture debt and structured solutions.

Alteria Capital has backed companies including Rebel Foods, BharatPe, Lendingkart, Zestmoney, Dunzo, Portea, Toppr, Spinny, Stanza, Vogo, Melorra, Mfine, Generico, Loadshare, LBB, Beato, Maverix, Country Delight, Clover, Happay, Cropin, Cityflo, Onco, Nua, Damensch, Bombay Shirt Company, Sunstone Eduversity, Faces Cosmetics and Universal Sportsbiz.

Alteria competes with InnoVen Capital, Trifecta Capital, Blacksoil, Strides Ventures, among others.

Venture debt has been picking up pace in India with an increasing number of domestic investors willing to invest in them. A venture debt fund lends money to startups alongside equity investors. Since most banks do not lend to loss-making startups and have a prerequisite for collaterals, venture debt is the most sought after by the startup ecosystem.

These loans generally come with a tenure of 24-36 months and is therefore easier for the fund to rotate capital more efficiently.

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