Alteria Capital, which has backed startups such as Dunzo, Lendingkart and Faasos parent Rebel Foods, has launched its second venture debt fund and also roped in two executives from rival InnoVen Capital to strengthen its top deck.
The fund, which has received approval from the Securities and Exchange Board of India, seeks to raise Rs 1,000 crore ($135.7 million) and has a greenshoe option for another Rs 750 crore, Alteria said in a statement on Monday.
Alteria was founded in 2017 by Vinod Murali and Ajay Hattangdi, who were former top executives at InnoVen. Its debut fund had a target corpus to raise Rs 800 crore with a greenshoe option of another Rs 200 crore. It hit the final close at Rs 962 crore last year.
The new fund will primarily focus on early- and growth-stage startups with a cheque size of up to Rs 150 crore. The fund will also set aside a corpus for structured debt products aimed at later-stage companies, it added.
Alteria expects to make the first close of the new fund in the first half of next year. First close is a milestone after which alternative investments funds (AIFs) begin to deploy their capital.
Alteria did not reveal any information on its potential Limited Partners (LPs) for its new fund. For its debut fund, investors such as the Azim Premji Foundation and Flipkart co-founder Binny Bansal had joined in as LPs.
Private-sector lender IndusInd Bank, Small Industries Development Bank of India (SIDBI), several large domestic banks and family offices had also invested in Alteria's debut fund.
Venture debt has become an integral part of a startup’s funding cycle in India over the past couple of years as it rarely involves stake dilution by founders and provides companies with more time to grow.
Its popularity got a shot in the arm last year as new players entered the nascent industry, older players strengthened their war chest and mature startups such as BigBasket and LendingKart pocketed cheques as big as Rs 100 crore. This underlined how venture debt could help a startup before a larger equity funding round from a venture capital firm.
“This is a dislocated asset class with low correlation to listed stocks or bonds and hence provides a good hedge as part of their asset allocation,” said Murali.
The venture debt firm also said it has appointed Ankit Agarwal and Punit Shah as partners.
“Adding two high-calibre partners like Ankit and Punit will enable us to collaborate, identify and act more effectively against a rapidly growing market opportunity,” said Hattangdi.
Prior to joining Alteria, Agarwal and Shah were with InnoVen. Agarwal is also a mentor at Atal Innovation Mission, a government initiative to promote innovation and entrepreneurship. Shah earlier worked with Yes Bank, HSBC and consulting firm EY.
Alteria has made at least 25 investments so far. Last week, VCCircle reported that it invested in an Accel-backed online healthcare platform.
Earlier this year, Alteria provided venture debt to agri-tech startup Clover. In February, it doubled down on diversified hyperlocal delivery services platform Dunzo Digital Pvt. Ltd.
The venture debt firm had made its first investment in ready-to-cook food startup Fingerlix. It followed this up with infusions 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.