Trifecta Capital has hit the final close of its third venture debt fund at Rs 1,777 crore (around $213 million), Rahul Khanna, co-founder and managing partner, Trifecta, said
The third fund was oversubscribed, surpassing its initial target of Rs 1,500 crore. Investors include large global financial institutions, domestic conglomerates, banks, insurers, development financial institutions, public sector entities, and family offices, he added.
The firm has now doubled its count of offshore investors, both individuals and institutions, compared to the Trifecta Venture Debt Fund-II. Around 85% of the capital was raised from domestic investors while the remaining portion sourced from global investors, mainly from the Indo-Japan corridor, said Khanna.
Launched in 2021, the third fund has already allocated Rs 1,500 crore ($180 million) across 51 companies. With a capital recycling provision, it will have an investable corpus of up to Rs 4,440 crore, or $535 million.
The venture debt funds were established in 2015 by Khanna and Nilesh Kothari.
Trifecta Capital has raised nearly Rs 5,000 crore across its three venture debt funds and a growth equity fund. The third fund has so far invested in The Good Glamm Group, Zepto, Rebel Foods, Infra.Market, Udaan, and Globalbees among others. It is looking to raise its fourth fund in the first half of 2024, said Khanna.
According to him, the firm will also look to raise its second growth equity fund next year. Last year, it had raised Rs 1,500 crore at the final close of its maiden equity fund, Trifecta Leaders Fund-I, to invest in growth-stage startups.
“The credit quality of the portfolio of Trifecta Venture Debt Fund-III is exemplary, with 40% of the funds’ portfolio companies having already raised follow-on equity financing within just 21 months since the first investment, despite a broader funding slowdown. Furthermore, the median revenue growth rates in investee companies are very healthy at 60%-plus annually,” he said.
According to the BCG-Trifecta Capital report published earlier this year, Indian Venture Debt investments grew rapidly at a compound annual growth rate (CAGR) of 22% in the last three years, clocking nearly $1 billion as of 2022. This is projected to grow eight times to reach $6-7 billion by 2030.