Trifecta Capital Announces First Close Of $130 Mn Fund For Late Stage Startups

Venture debt firm Trifecta Capital announced the first close of its late-stage venture capital Fund – Trifecta Leaders Fund – I, with commitments of over INR 1,000 Cr ($130 Mn). The fund was launched 3 months ago and has a target corpus of INR 1,500 Cr ($200 Mn). 

The first close has seen participation from domestic investors including large corporates, insurance companies, marquee family offices, ultra-high net worth individuals (UHNIs), and entrepreneurs, said the firm. 

Existing investors of Trifecta Capital’s Venture Debt Funds have also invested in this fund. For the balance INR 500 Cr ($70 Mn), the firm is in discussions with several domestic and global institutional investors.

Founded by Rahul Khanna and Nilesh Kothari in 2014, Trifecta Capital invests across sectors such as B2B, consumer services, consumer brands, ecommerce, mobility, edtech, agritech, fintech and healthcare.

Trifecta Leaders Fund – I will invest in a targeted set of category leaders, selected predominantly from Trifecta Capital’s portfolio across its venture debt funds where the firm has proprietary knowledge of the businesses as well as deep relationships with founders and investors. The fund will invest INR 100-200 Cr ($15–30 Mn) each in around 10-12 companies for minority stakes, through a combination of primary and secondary positions.

“Through this new fund, we aim to provide investors access to the value creation opportunity in the last leg of private to public journey of tech companies. With strong institutional investor interest in India internet, we expect listings of several large well known startups, and creation of liquidity for existing investors as these companies tap the public markets for their longer term financing needs. We believe that Trifecta Leaders Fund-I is an attractive opportunity for investors who have so far been unable to access these great companies since they are predominantly funded by offshore VC and PE funds,” said Rahul Khanna, Managing Partner, Trifecta Capital.

The fund claims to target a structural gap in the late-stage VC ecosystem in India, and in addition to primary infusions, will cater to the unmet needs of late-stage companies by providing off-cycle liquidity to early investors, angels, current and former employees including consolidation of equity cap tables. 

Trifecta Is Expanding Its Team

The leadership team at Trifecta comprising Rahul Khanna, Nilesh Kothari and Lavanya Ashok has extensive lifecycle investing, operating and entrepreneurial experience across global institutions like Canaan Partners, Accenture and Goldman Sachs. 

It has onboarded Lavanya Ashok as Partner (ex-MD Goldman Sachs, Principal Investment Area) and Surbhi Garg as a VP (previously at Reliance Jio Strategic Investments), and is in the process of augmenting the team with strong private and public markets investing expertise as part of its  late stage equity strategy. The fund has also set-up an advisory board comprising global tech experts who will support portfolio companies as they navigate their path to liquidity.

“Having already made five investment commitments from the Fund, we are solving for diverse capital needs spanning primary capital for growth and off-cycle liquidity to early investors. Our team is equipped with the skills and experience to partner with founders as they embark on the path to finding permanent sources of capital and will fill a structural gap in the late-stage VC financing landscape,” said Lavanya Ashok, Partner, Trifecta Capital.

Trifecta Capital, across its two venture debt funds, has invested INR 2,000 Cr in over 75 companies and its portfolio now comprises of 20 unicorns and soonicorns including PharmEasy, BigBasket (acquired by Tata Group), Cars24, Infra.Market, Dailyhunt, BlackBuck, Ninjacart, NoBroker, Kreditbee, Dehaat, Turtlemint, Livspace, Mobikwik, Ixigo and BharatPe amongst several others. These companies cumulatively valued at $ 22 Bn have raised over $ 8 Bn in equity from marquee, global VC funds.  With the launch of Trifecta Leaders Fund-I, the Firm is extending its platform capabilities as a lifecycle capital provider to the startup ecosystem. 

There are over 50 unicorns in India, up from 5 in 2014 and expected to grow to 100 by 2025. Presence of large unicorns and platforms as well as favourable regulatory changes to ease listing of start-ups in India is expected to result in a large number of IPO and M&A opportunities in the country and aid exits.