Alteria Capital said on Monday it has made the final close of its first venture debt fund at $140 million (Rs 960 crore).
The firm, which was founded last year by former top InnoVen Capital executives Ajay Hattangdi and Vinod Murali, had a target corpus to raise Rs 800 crore with a greenshoe option of another Rs 200 crore.
Azim Premji Foundation and Flipkart co-founder Binny Bansal have joined as Limited Partners (LPs), or investors, in the fund, Alteria Capital said in a statement. Kiran Reddy, a promoter of SPI Cinemas, which was bought by PVR last year, also invested in the fund.
Other LPs in the fund include private-sector lender IndusInd Bank, Small Industries Development Bank of India (SIDBI), several large domestic banks and family offices, it added.
SIDBI's contribution is its single-largest commitment to an entity under its startup fund of funds programmes, it said. It has allocated Rs 157.5 crore to the venture debt firm.
Alteria Capital had marked the first close of its fund at Rs 356 crore in March last year followed by the second close at Rs 625 crore in October.
Co-founder Murali said the fund will end up deploying around Rs 1,800 crore since it has the ability to recycle capital.
"We are seeing a very strong pipeline of startups across technology, healthcare and consumer segments to absorb this capital over the next couple of years," he added.
The venture debt firm had made its first investment in ready-to-cook food startup Fingerlix. It followed this up with investments in Sachin Tendulkar-backed celebrity fashion firm Universal Sportsbiz Pvt. Ltd, Mumbai-based ed-tech startup Toppr Technologies Pvt. Ltd and home healthcare services Portea.
Its other investments include Delhi-based student accommodation platform Stanza Living, scooter-sharing startup Vogo and Rebel Foods, an internet kitchen platform that owns and operates a number of brands including Faasos and Behrouz Biryani.
Last month, it wrote a Rs 80 crore ($11.5 million) cheque to digital lending startup Lendingkart, in one of the largest venture debt cheques written to an Indian company.
Venture debt is becoming an attractive tool of funding for startups as it rarely involves stake dilution by the promoters. It also provides companies more time to grow.
Still, there are only a handful of players providing venture debt in the market.
In May, venture debt firm InnoVen received an additional $200 million (Rs 1,400 crore) funding commitment from shareholders Temasek Holdings and United Overseas Bank Ltd.
Trifecta Capital is raising capital for its second investment vehicle, for which it has made “great progress” and aims to have an investible corpus of Rs 1,500 crore, Trifecta Capital managing partner Rahul Khanna had told VCCircle earlier this year.
The latest entrant in the market is BAC Acquisitions, floated by Flipkart co-founder Sachin Bansal last year. Although it has not positioned itself as a pure play venture debt firm it has been issuing venture debt cheques to companies like BoAt and Bounce.