Alteria Capital Raises $15 Mn From SIDBI For Its $150 Mn Maiden Venture Debt Fund

Venture debt firm Alteria Capital has raised $15 Mn (INR 100 Cr) for its $150 Mn (INR 1,000 Cr) maiden debt fund. The capital, as per reports, has been secured from Small Industries Development Bank of India (SIDBI).

Launched in October 2017 by former Innoven Capital executives Ajay Hattangdi and Vinod Mural, Alteria Capital India Fund I has a total corpus of $123 Mn (INR 800 Cr). It carries a green-shoe option of a further $30 Mn (INR 200 Cr).

In March 2018, the firm received commitments of $56.1 Mn (INR 365 Cr) from institutional investors and family offices – including IndusInd Bank – for the first close of its maiden fund. It expects to make its final close in H2 2018.

Confirming the latest fundraise from SIDBI, Vinod Murali, co-founder and Managing Partner at Alteria, said, “We had strong tailwinds since getting the Securities and Exchange Board of India (SEBI) approval in November, which allowed us to do our first close in 100 days. We recently received a sanction of INR 100 Cr from SIDBI’s fund of funds scheme and we are currently in talks with other domestic foundations, family offices, ultra HNIs and institutions to invest in Alteria.”

The fund’s first close was supported by Avendus Wealth for placement to the domestic family office segment of investors.

“We have also received our approvals for the offshore feeder entity in Mauritius in March, which now allows us to kick-start our fund-raising discussions offshore, formally,” added the investment firm’s other co-founder Ajay Hattangdi.

As per the founders, Alteria Capital India Fund I will use the capital to back startups that have already raised VC funding and provide them with specialty debt solutions which are complementary to equity capital. Its key focus areas include consumer services, technology, healthcare, education and logistics, among others.

Hattangdi further stated, “We will definitely be doing a lot of work in healthcare and education sectors which are also considered to be impact investments. We are sector agnostic but focus will be on technology, consumer and healthcare. The companies we fund have to be high growth business typically and our return expectation will be similar across every situation given our obligation to our investors,”

Till date, Alteria has backed two startups. Earlier in March 2018, ready-to-cook foodtech startup Fingerlix raised $1.31 Mn (INR 8.5 Cr) of venture debt from Alteria Capital. A week later, the firm pumped $4.64 Mn (INR 30 Cr) in Bengaluru-based fashion startup Universal Sportsbiz Pvt Ltd (USPL).

Overview Of Alteria Capital: From 2017 To Present

Ajay Hattangdi and Vinod Murali, who were also the co-founders of Mumbai-based venture debt fund InnoVen Capital, had made the announcement about the launch of the debt fund in August last year. At that time, it was stated that the fund would have a corpus of about $157 Mn (INR 1000 Cr). The fund was looking to make the first close by the first quarter of 2018, targeting to raise 25%-50% of the corpus.

Ajay and Vinod had earlier launched Innoven Capital along with Singapore’s sovereign wealth fund Temasek. While Hattangdi was the India CEO at Innoven, driving international expansion in Southeast Asia and China; Murali was the deputy CEO of India operations. They resigned from their respective positions at Innoven Capital in June 2017.

The fund received the nod of market regulator SEBI to launch a $150 Mn (INR 1,000 Cr) fund for startups. Alteria Capital is registered as a category II alternative investment fund (AIF). It has a tenure of seven years, with a possible extension of two years.

Through its maiden fund, the venture debt firm is primarily looking at Series A to late stage startups. According to the founding team, the fund targets startups across early and growth stages with cheque sizes ranging up to $15 Mn (INR 100 Cr). It aims to give startups access to debt that is generally not available through traditional commercial debt providers.

Speaking on the firm’s plans for the future, Murali said, “We are possibly the only active venture debt player in India who can write cheques of more than $9 Mn (INR 60 Cr) for Indian companies. We will end up deploying more than $150 Mn (INR 1,000 Cr) over a span of four years. We will draw capital over three years and since we can recycle the principal amount, we will end up deploying almost $300 Mn (INR 2,000 Cr) over four years, unlike an equity investor where they cannot recycle capital.”

Beyond venture debt, the duo is also looking to earmark under 10% of Alteria Capital’s fund for selective, small equity-based investments (up to $1 Mn) in startups that have borrowed debt from them in the past.

Apart from Alteria Capital, other investment firms that are banking on the country’s growing venture debt market include Temasek-backed Innoven Capital,  India-focused impact investment fund Lok Capital, Trifecta Capital, IvyCap Ventures, IntelleGrow and Mumbai-based VC fund Unicorn India Ventures, among others.

(The development was reported by Livemint)