Trifecta Capital to launch $200M fund to invest in IPO-bound Indian startups

Trifecta Capital is planning to launch a late-stage venture capital fund — Trifecta Leaders Fund – I — with a targeted corpus of Rs 1,500 crore to invest in new economy companies that are likely to pursue an IPO in the next one-three years.

The new fund will invest $15-30 million each in around 10 companies for minority stakes through a combination of primary and secondary positions. It has already built a strong pipeline of 20 companies as potential portfolio candidates. With the launch of Trifecta Leaders Fund – I, the VC firm is extending its platform capabilities as a lifecycle capital provider to the startup ecosystem, it said in a statement.

Trifecta Capital is in the process of obtaining the SEBI approval for the fund and will commence investment operations post regulatory approvals.

The selected startups are from Trifecta Capital’s portfolio across its venture debt funds, where it has proprietary knowledge of the businesses and a deep relationship with the founders and investors.

Trifecta Capital has invested in over 70 companies across its two venture debt funds, and its portfolio comprises nine unicorns and 11 soonicorns, including Bigbasket, Pharmeasy, Cars24, Vedantu, Infra.Market, ShareChat, DailyHunt, Urban Company, CarDekho, BlackBuck, Ninjacart, NoBroker, Kreditbee, DeHaat, Turtlemint, Livspace, and BharatPe, among several others.

These startups have cumulatively raised $8.1 billion of equity, and are cumulatively valued at $20 billion.

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Speaking on the development, Rahul Khanna, Managing Partner, Trifecta Capital, said, 

“As the startup and investing ecosystem matures, it is natural to see large, well-known startups plan their IPOs to create liquidity for existing investors, and tap the public markets for their long-term financing needs. We believe that Trifecta Leaders Fund-I is a timely and attractive opportunity for investors who have so far been unable to access these great companies as they are predominantly funded by offshore VC and PE funds.”

In a statement, the VC firm said the fund is filling a structural gap in the late-stage VC ecosystem in India, and in addition to primary infusions, it will cater to the unmet needs of late-stage companies by providing off-cycle liquidity to early investors, angels, current and former employees, including consolidation of equity cap tables. 

With a fund duration of only five years, Trifecta Capital said the fund will provide a unique investment opportunity for investors — both domestic and offshore — to partner with India’s new economy category leaders that are already household names, and will continue to grow significantly over this decade.