Trifecta Capital Advisors LLP, India’s first independent venture debt firm, has raised a little over Rs.200 crore (around $30 million) in capital commitments as part of the first close of its debut fund.
The New Delhi-based fund, dubbed Trifecta Venture Debt Fund I, has a final target corpus of Rs.500 crore (around $76 million). The final close of the fund is expected in the next six-nine months.
The mix of investors in the fund so far include domestic institutional investors such as private insurance companies, corporate foundations and large family offices.
RBL Bank, which came on board earlier in March with a Rs.50 crore commitment, is an anchor investor in the fund.
“We achieved the first close on 10 September. Over 90% of the commitments raised so far are from institutional investors,” Trifecta co-founder and managing partner Nilesh Kothari said in a telephone interview.
He did not disclose the names of the institutions that have invested in the fund.
“As we continue to fundraise and get to our target Rs.500 crore, we hope to add a few offshore investors to the mix,” he added.
Prior to Trifecta, Kothari was managing director of ventures and acquisitions at technology consulting firm Accenture Plc. Last September, he teamed up with Rahul Khanna, who was part of the team that led US venture capital firm Canaan Partners’ investments here, to start the venture debt firm.
The firm’s debut fund is the first debt fund to be registered as a Category II AIF under the Securities and Exchange Board of India’s (Sebi) AIF (Alternative Investment Funds) Regulations. The first close, industry parlance for the threshold of capital that an AIF needs to raise before it can start making investments, comes about four months after the fund was approved by Sebi.
The overall Rs.500 crore it plans to raise consists of a principal corpus of Rs.300 crore and a greenshoe option of Rs.200 crore.
The firm plans to start making investments shortly.
“We have a pipeline of 50-60 companies right now. We will close out a couple of terms sheets by next month,” said Rahul Khanna, Trifecta co-founder and managing partner.
The firm’s deal pipeline includes unlisted companies across sectors such as healthcare, consumer Internet, technology, logistics and supply chain. It would typically back companies that are already funded by venture capital investors and it would invest anywhere between Rs.5 crore and Rs.25 crore in each company. The fund has a maximum life of seven years and investments would be made using primarily senior secured debt with attached warrants. It would also have a ‘right to invest’ in direct equity in investee companies on a case-by-case basis.
Apart from Trifecta, the only other significant venture debt player in the Indian market is Innoven Capital India, backed by proprietary capital from Singapore investment firm Temasek Holdings. Unlike Trifecta, it operates as a non-banking financial company.
Innoven operated as SVB India Finance before it was acquired by Temasek in April. The Innoven team, led by former Citibank executive Ajay Hattangdi, has been investing in the venture debt market for more than seven years and has already deployed Rs.700 crore (over $100 million) across 80-odd transactions.
In May, the firm announced a number of new deals that involved companies such as Capillary Technologies, Greendust, Practo Technologies and Zoomcar. It plans to double it new loan commitments to $50 million over the next 12-15 months.
The overall venture debt market in India, by Innoven’s estimates, has the potential to cross $1 billion on a cumulative basis in the next five-seven years.