Debt Investor Trifecta Turns To Equity Investments With $200 Mn Fund

Indian venture debt firm Trifecta Capital has said that it is planning to launch a INR 1,500 Cr ($202 Mn) late-stage venture capital fund named Trifecta Leaders Fund I to make equity investments in tech companies that are looking at an initial public offering (IPO) in the next one to three years. The new fund will be a sharp departure from Trifecta’s venture debt focus till now.

Trifecta Leaders Fund I will invest $15 Mn-$30 Mn each in around 10 companies for minority stake, through a combination of primary and secondary positions. It has already built a strong pipeline of 20 companies as potential portfolio candidates.

The startups will be selected predominantly from Trifecta Capital’s portfolio across its venture debt funds. The investment firm believes that they would already have the proprietary knowledge of the businesses while making an equity investment in such a company, and also have a deep relationship with the founders as well as other 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. Last month, Trifecta also announced the final close of its second fund, Trifecta Venture Debt Fund-II. at INR 1,025 Cr (roughly $150 Mn).

Trifecta Capital has invested across 70 companies across its two venture debt funds and its portfolio comprises nine unicorns including PharmEasy, BigBasket (acquired by Tata Group), Cars24, Infra.Market, Dailyhunt, BlackBuck and others. It also claims to be an investor in 11 soonicorns (soon-to-be-unicorns) like, Vendantu, ShareChat, Urban Company, CarDekho, Ninjacart, NoBroker, KreditBee, BharatPe and others.

The investment firm believes that the latest fund will fill a structural gap in the late-stage VC ecosystem in India and also provide off-cycle liquidity to early investors as well as employees off the company. Besides this, the fund will help the late stage companies consolidate its equity cap table.

Trifecta Leadership Fund I, which has a duration of only five years, is led by a team that has a cumulative 75+ years of experience in lifecycle investing, operating and entrepreneurial experience across institutions like Canaan Partners, Accenture and Goldman Sachs. The company has onboarded Lavanya Ashok as partner, who was the ex MD of Goldman Sachs’ principal investment area and Surbhi Garg, who was associated with Reliance Jio Strategic investments previously, as the vice president.

“Trifecta Leaders Fund – I has also established a best-in-class governance framework with a global advisory board comprising domain-knowledge experts who can support portfolio companies as they navigate their path to liquidity,” the company has said.