Venture Debt 2.0 For Innoven Co-Founders Ajay Hattangdi, Vinod Murali; Launch Alteria Capital

The co-founders of Mumbai-based venture debt fund InnoVen Capital Ajay Hattangdi and Vinod Murali have launched Alteria Capital. It is a debt fund with a corpus of about $157 Mn (INR 1000 Cr).

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.

Alteria Capital will be registered as a category II alternative investment fund (AIF). It will have a tenure of seven, with a possible extension of two years.

Talking about the development, Ajay Hattangdi, Managing Partner at Alteria Capital said, “From an operating standpoint, the AIF is a more efficient vehicle to invest, especially with regard to exits for investors.”

As per recent reports, Alteria Capital will have a corpus of about $125.7 Mn (INR 800 Cr). This will be accompanied by a Greenshoe option of raising an additional $31.4 Mn (INR 200 Cr). Hattangdi and Murali said that they are currently in the process of registering  Alteria Capital with SEBI.

The fund is looking to make the first close of the fund by the first quarter of 2018. It is targeting to raise 25%-50% of the corpus. Alteria Capital will have a ticket size from $471K – $15.7 Mn (INR 3 Cr to INR 100 Cr) at Series A level.

Beyond venture debt, the duo will 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. Commenting on the same, Vinod Murali said, “It is more about plugging the rounds so that a series-B or -C round happens faster. We just juice up and improve our returns.”

Alteria Capital is expecting that the registration process will be over by mid-September. Post that the fund will begin the official fundraising.

Venture Debt is fast emerging as a viable replacement of equity financing in the Indian startup ecosystem. It gives the startups a chance to arrange for cash without diluting their equity stakes. Trifecta Capital is also a prominent venture debt provider.

Apart from Innoven Capital, Ajay Hattangdi and Vinod Murali’s venture debt fund Alteria Capital will compete with Trifecta Capital in the venture debt space. With a proposed corpus of about $78.5 Mn (INR 500 Cr) Trifecta Capital has backed Bigbasket, PaperBoat, Rivigo, Nephroplus, Urban Ladder, Industrybuying, OneAssist, Urban Clap, and IdeaForge among others.

(The development was reported by ET)