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Alteria Capital closes second venture debt fund at Rs 1325 Cr

Alteria Capital, a venture debt fund focussed on innovative startups has closed its second fund. According to the fund, within just four months of its launch, Alteria Capital II is not only massively oversubscribed but has surpassed the target fund of Rs 1000 crore. 

The fund is currently the leading venture debt provider in the nation and now has an AUM of Rs. 2300 Cr across two venture debt funds. SEBI showed a green flag to the fund in 2020 for its second venture debt fund with a target corpus of Rs. 1000 crore and a greenshoe of Rs. 750 crore. 

The fund intends to target startups in their early and growth stages with cheque sizes up to Rs. 150 Cr. Additionally, there will be an allocation for structured debt products targeted at later-stage companies with a differentiated risk profile.

Domestic investors have displayed a strong interest to participate in this attractive asset class which resulted in oversubscription in merely four months. The company currently manages Rs. 2300 crore of AUM across two funds, making it the most extensive pool of capital for venture debt for startups in India. 

Commenting on the investment, Vinod Murali, Co-founder and Managing Partner, Alteria Capital, said, “A fund size of over Rs 1000 crores for debt funding is a good sign for the startup ecosystem. It means there are more different kinds of capital. It was unimaginable for venture debt to have this fund size. Also, fundraising is increasingly getting better with time. This in turn is a good sign for the overall ecosystem. We will be addressing the needs of larger companies as well, who are looking for structured capital, different from traditional venture debt,” 

Alteria Capital Fund II will be the biggest pool of alternative debt capital for early and growth-stage Indian start-ups. Alteria can recycle capital and will have more than Rs. 4000 Cr available for funding startups across Venture Debt and Structured Solutions. 

In a statement, Vinod said, “The Indian startup ecosystem is emerging as a strong value creator and domestic investors have appreciated the consistent, strong returns from our first fund. We are excited to be able to support more founders who are contributing to India’s growth amidst all the current challenges and our focus continues to be umbrella sectors like consumer, technology, and healthcare. This fund will also allow us to provide larger cheques to later-stage startups through structured solutions”. 

The statement added that post onboarding Ankit Agarwal and Punit Shah as partners, the company will have the most experienced team in the industry with 45 years of total venture debt experience comprising over 250 transactions.

The fund promoted by veterans Ajay Hattangdi and Vinod Murali will use the capital to back startups that have already raised VC funding and provide them with a range of specialty debt solutions. 

“We are honored to have the confidence of our investors and be able to raise the fund in such a short period, and that too, with the ongoing challenges of the global pandemic,” said Ajay Hattangdi, Co-founder and Managing Partner. “But we are very aware of our responsibility to deliver attractive returns to our investors, which we will do by continuing to partner with high-quality equity sponsors in supporting the development of companies with innovative solutions that challenge the status quo.” 

Speaking on the development, Shishir Gupta, Founder and CEO of StartupLanes said, “Oversubscription of the fund itself speaks volumes about its success. It also presents a great opportunity for startups in the early and growth stages.

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