Venture debt firm Alteria Capital has announced the final close of its Fund III (Scheme A) – its venture debt scheme- at Rs 1,550 crore, highlighting the growing demand for debt financing for venture capital-backed startups.
The firm has a twin-scheme strategy in its third fund that includes a Venture Debt Scheme (Scheme A) and a Shorter Duration Scheme (Scheme B), which aims to meet short-term working capital needs of startups.
While the venture debt scheme has been oversubscribed and has closed at $195 million, the Shorter Duration Scheme has been opened for subscription with a final close expected by the end of this year. Altogether, the third fund is expected to raise anywhere between $250-300 million.
“Despite macroeconomic volatility, there has been strong interest from domestic investors to participate in this attractive asset class including institutions as well as large family offices, senior professionals, founders and other stakeholders from the startup ecosystem,” the firm said in a statement.
Alteria Capital has so far backed companies such as Cars24, BharatPe, Spinny, and Mensa Brands and currently has an AUM of Rs 4,350 crore across three funds – the largest venture debt pool for startups in India. Its current portfolio also includes companies such as One Card, Renee Cosmetics, Bliss Club, Giva, Captain Fresh, Bluestone and Ather.
The firm’s Fund III (Scheme A) had a target size of 1000 crore, with a green shoe option, which has been significantly oversubscribed with more than half the fund contributed by existing investors. The fund has already deployed 50% of the total capital commitments, with cheques of up to 200 crore per company.
Besides the venture debt scheme, the firm is seeing a strong demand for short-term working capital solutions among startups. “The Shorter Duration Scheme will focus on filling a wide gap that exists for companies that have short term cash flow mismatches within their operating cycles as well as playing a central role in providing capital to fintech companies for bolstering their on-lending needs,” said its managing partner Punit Shah.