Alteria Capital announces first close of venture debt fund at Rs 1325 Cr

The venture debt fund, Alteria Capital, has announced the close of its second fund. The fund stated that Alteria Capital II has been heavily oversubscribed, and has exceeded the target fund of Rs 1000 crore within four months of its launch.

The fund now has an AUM of Rs. 2300 Cr across two venture debt funds and is the largest venture debt provider in India currently. The fund received SEBI approvals in 2020 for its second venture debt fund with a target corpus of Rs. 1000 crore and a greenshoe of Rs. 750 crore.

The fund will target startups across early and growth stages with cheque sizes up to Rs. 150 Cr. There will also be an allocation for structured debt products aimed at later stage companies which have a differentiated risk profile.

There has been strong interest from domestic investors to participate in this attractive asset class resulting in oversubscription in a very short period of time. Alteria currently manages Rs. 2300 crore of AUM across two funds, which makes it the largest pool of capital for venture debt for Indian startups currently. 

"A fund size of over Rs 1000 crores for debt funding is a good sign for the startup ecosystem. It means there are more different kinds of capital. It was unimaginable for venture debt to have this fund size. Also fund raising for funds is increasingly getting better with time. This in turn is a good sign for the overall ecosystem. We will be addressing the needs of larger companies as well, who are looking for structured capital, different from traditional venture debt," Vinod Murali, Co-founder and Managing Partner, Alteria Capital, told YourStory.

Alteria Capital Fund II will be the largest pool of alternative debt capital available for early and growth stage start-ups in India. With its ability to recycle capital, Alteria will effectively have over Rs. 4000 Cr available for funding startups across Venture Debt and Structured Solutions. 

In a separate statement, Vinod said, "The Indian startup ecosystem is emerging as a strong value creator and domestic investors have appreciated the consistent, strong returns from our first fund. We are excited to be able to support more founders who are contributing to India’s growth amidst all the current challenges and our focus continues to be umbrella sectors like consumer, technology and healthcare. This fund will also allow us to provide larger cheques to later stage startups through structured solutions”.

The statement added with the recent addition of Ankit Agarwal and Punit Shah as partners, Alteria Capital will have the most experienced team in the industry with a cumulative 45 years of total venture debt experience covering over 250 transactions.

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

“We are honoured to have the confidence of our investors and be able to raise the fund in such a short period of time, and that too, with the ongoing challenges of the global pandemic” said Ajay Hattangdi, Co-founder and Managing Partner. “But we are very aware of our responsibility to deliver attractive returns to our investors, which we will do by continuing to partner with high quality equity sponsors in supporting the development of companies with innovative solutions that challenge the status quo.”

Alteria Capital has backed companies like Rebel Foods, BharatPe, Lendingkart, ZestMoney, Dunzo, Portea, Toppr, Spinny, Stanza Living, Vogo Automotive, Melorra, mfine, Generico, Loadshare, LBB, BeatO, Maverix, Country Delight, Clover, Happay, CropIn, Cityflo, Onco.com, Nua, DaMENSCH, Bombay Shirt Company, Sunstone Eduversity Pvt. Ltd., Faces Cosmetics and Universal Sportsbiz.