Venture debt firm Alteria Capital Advisors LLP, founded by former top executives at venture debt provider InnoVen Capital India Pvt. Ltd, said on Thursday that it has marked the first close of its debut fund with commitments of Rs 356 crore ($54.76 million).
Alteria said in a statement that the fund had received contributions from a large family office foundation, other family offices and institutional investors including private sector lender IndusInd Bank.
The fund had received regulatory clearance last October. Registered with Securities and Exchange Board of India (SEBI) as a category-II Alternative Investment Fund, it has a target corpus of Rs 1,000 crore ($154 million) including a greenshoe option of Rs 200 crore.
The company said that sees strong visibility of additional investment beyond the first close from a number of domestic and foreign investors. It expects a final close in the second half of 2018.
Alteria said the fund will target and early- and growth-stage startups with cheques of up to Rs 100 crore (Rs 16.5 million).
Vinod Murali, co- founder and managing partner at Alteria Capital, said the fund is expected to conclude its first two debt investments by the end of this month.
Venture debt is an important tool of funding for companies as it rarely involves stake dilution by the promoters.
It also provides companies more time to grow. The segment is growing in India even as venture capital activity is seeing a slowdown of sorts.
“The demand for venture debt has been steadily increasing as more entrepreneurs have experienced the product and it is applicable across various end-uses like working capital, capex, acquisition finance and other special situations," Murali said.
Roopa Satish, who heads corporate and investment banking at IndusInd Bank, said that the partnership model makes the funding structure less risky for the lender as Alteria has demonstrated expertise in this space.
Ajay Hattangdi, who is also a managing partner at Alteria, and Murali had floated the firm last year after quitting as chief executive officer and deputy CEO respectively at InnoVen, which is backed by Singapore state investment firm Temasek Holdings.
Months after they left, InnoVen Capital appointed Ashish Sharma, former chief executive and president of GE Capital India, as the new chief executive officer of its Indian operations.
In a recent interview with VCCircle, Sharma said InnoVen Capital has the appetite to do larger transactions after it made a record Rs 100 crore investment last year in Yatra Online Inc, which runs travel portal Yatra.com.
Other major players offering debt funding to early-stage companies in India include Delhi’s Trifecta Capital Advisors, Bengaluru-based CapitalFloat, IFMR Capital of Chennai and Ahmedabad-based Lendingkart.