“We had announced our first close at Rs 750 crore in March last year and have made a final close now at Rs 1,025 crore,” said co-founder and managing partner Rahul Khanna.
Trifecta Capital, launched in 2015 with a Rs 500-crore fund, is one of the first venture debt funds from India.
A venture debt fund invests alongside equity investors in startups, helping them meet working capital and other debt needs. In lieu of the debt, they get a small equity stake in the company—offering equity upside to these funds as and when valuations zoom. Because of the cyclical nature of the capital deployed, a venture debt fund can typically invest more than the total funds that they have received.
Trifecta counts unicorns such as BigBasket, Infra.Market, Cars24, ShareChat and Vedantu as portfolio companies.
The first fund had PremjiInvest, the family office of Wipro founder chairman Azim Premji, and RBL Bank Ltd. as anchor investors, while the second has seen investments from a new set of investors along with existing ones, Khanna said.
“Almost a dozen life and general insurance companies, large family offices and Sidbi have pumped in money in the second fund,” he said.
The debt fund has already returned 75% of the capital from the first fund to its investors and is looking to fully return the fund by the end of the June quarter. “We have already deployed almost 75% of the commitment we received for the second fund. We intend to fully deploy the new fund by end of the current calendar year,” Khanna said.
In all, the fund has invested Rs 2,000 crore in 72 companies so far across fund I and fund II.
After deploying the current fund, the firm plans to launch a third one as well. “We plan to raise around Rs 1,200-1,500 crore for the third fund,” Khanna said. “We will launch the fund by the end of the calendar year.”
Venture debt investing in India has seen an unprecedented surge in the last five years.
According to Inc42’s ‘Inside India’s Startup Venture Debt Funding Boom’ report, startup venture debt funding in India (2015-2020) crossed the $1 billion mark in the year gone by, on the back of 2x growth in comparison to 2019.
“Between 2019 and 2020 there has been a 2x surge in total venture debt funding in Indian startups from $217 million to $427 million. This clearly underlines the growing prominence for venture debt during pandemic times and given this, 2020 was by far the best year for venture debt funding in India,” the report said.