Alteria Capital has hit the final close of its second venture debt fund at ₹1,800 crore, making it the largest venture debt fund in India. This is also one of the largest fundraises by a startup-focused investor from domestic investors.
The investor, which had hit the road for its second fund in December, now has ₹2,750 crore in assets under management.
“We stopped formal fundraising in June; we had received all the commitments by then. For the second fund, we have raised double the amount of capital in half the time it took to raise the first fund,” said Vinod Murali, managing partner, Alteria Capital.
“We have broadened the investor base significantly in the second fund. We have around 300 investors in the new fund, including institutional investors, family offices and high net-worth individuals (HNIs). Half of the fund was raised from investors of the first fund,” he added.
New investors in the second fund also include startup founders.
“We received commitments from startup founders, many of whom are founders of the companies that we backed from our previous fund. The startup founders have seen liquidity in the last six-eight months through secondary share sales and they have put some meaningful commitments into the fund,” said Murali.
Alteria had set a target of ₹1,000 crore for the second fund, with a green-shoe option to raise another ₹750 crore. Subsequently, investors showed interest in committing over ₹2,000 crore.
The strong demand for the fund, according to Murali, was due to the growth and maturity of the domestic investor ecosystem and the performance of Alteria’s first fund, which was raised in 2018.
“The entire fund has been raised from domestic investors. Two-three years ago, it would have been impossible to raise this kind of corpus only from domestic capital. This is a sign of the maturity of the domestic capital universe. The performance of the first fund has been very well received by investors. We still have zero losses even after two waves of covid-19 and we have returned ₹250 crore income from the first fund. Our risk management has been strong and returns are better than other fixed-income products,” he added.
Alteria has already drawn down 35% of the second fund’s corpus to deploy in various deals.
It has so far backed 50 Indian startups such as Infra.Market, Dealshare, Mensa Brands, Lendingkart, Zestmoney, Rebel Foods, BharatPe, Dealshare, Dunzo, Portea and Spinny.
“We expect to close this calendar year with transactions worth $175-200 million. There is more need for structured debt today. There are several business models that need big amounts of leverage. The market is getting deeper and deeper,” said Murali.
The fund also expanded its partnership team with venture debt professionals Ankit Agarwal and Punit Shah.
Alteria had deployed a record $90 million in venture debt deals in the first six months of calendar year 2021, as venture debt becomes more mainstream in India’s fast-growing startup ecosystem that is churning out unicorns at a record pace.
