Mumbai-headquartered venture debt firm announced the final close of its third fund at Rs 1,550 crore. The Alteria Capital Fund III Venture Debt Scheme, with a target size of Rs 1,000 crore and a green shoe option, was significantly oversubscribed, a statement issued by the firm noted.
For its third fund, Alteria Capital has a twin scheme strategy, including a venture debt scheme and a shorter duration scheme, to meet the working capital needs of startups.
While it closed the venture debt scheme at $195 million (Rs 1,550 crore at a conversion rate of Rs 80 per dollar), the shorter duration scheme, currently under subscription, is expected to raise around $105 million.
“The shorter duration scheme is part of our third fund, which will include all transactions with a tenor of less than 18 months, a key differentiator from the venture debt rounds with deal tenors of up to 36 months,” Vinod Murali, Co-founder and Managing Partner of Alteria Capital, told YourStory.
He added that the Alteria Capital Fund III-Shorter Duration Scheme will have a timeline of three-and-half years for investors to get their capital back and cross the fund hurdle. The fund will have an additional two and a half years to monetise any equity upside as appropriate.
The shorter duration scheme—likely to see its final close by the end of 2024—will be available to all portfolio companies with the average cheque size ranging between Rs 3 crore and Rs 100 crore.
“The short duration scheme aims to solve for balance sheet efficiency, implying that we will be financing inventory investments or receivables build-up. This will also help fintechs with capital to build their loan books,” Murali added.
The VC firm has already deployed 50% of the total capital from its Rs 1,550 crore venture debt scheme across over 70 startups. The fund announced its first close in October 2022 and has backed companies, including One Card, Renee Cosmetics, Samunnati, Bliss Club, Rebel Foods, Giva, Lead School, and Bluestone, among others.
The third venture debt fund, a rupee fund, has an average cheque size of Rs 200 crore. Nearly 50% of the fund came from existing investors, Alteria Capital said in a statement.
The fund will continue backing startups across consumer brands, ecommerce, fintech, logistics, business-to-business platforms, rural and agritech, healthcare, and climate tech. It will also evaluate companies in the Gen AI and spacetech segments.
Founded in 2018, Alteria Capital has assets under management (AUM) of Rs 4,350 crore across three funds and has backed 107 venture debt deals in 2023.
Edited by Suman Singh
