Kashish Khattar is a 4th-year student at Amity Law School, Delhi. This article is a discussion about various funds that provide venture debt to the startup space in the country.
Following is a list of the Venture Debts funds that operate in India:
Managing Partners: Rahul Khanna & Nilesh Kothari
This is how the Co-Founder Rahul Khanna describes the maiden venture debt fund on his Linkedin profile (here) – “Trifecta Capital is a platform focused on providing alternative financing to new age businesses in India.” Its success stories include big names like BigBasket, LivSpace and Box8.
It is structured as an Alternative Investment Fund and governed by SEBI (Alternative Investment Funds) Regulations 2012 (here), the fund invests in technology/IP led, high growth companies backed by global VC Funds. Its portfolio companies consist of various Consumer Products; Consumer Services; E-commerce; Enterprise; and Healthcare.
Unicorn India Ventures
Managing Partner: Anil Joshi (Linkedin)
A livemint article (here) reports that Unicorn India Ventures was looking to raise Rs. 600 crores for their debt fund and had already closed down to Rs. 200 crores for their maiden fund. They were keen on targeting firms who had raised Series A and C rounds. Further, they were inclined to the idea of co-investment in VC-funded firms, who had a considerable amount of cash flow. They preferred to invest in ventures that were mainly focused on We are bullish on B2B models, software as a service, enterprise solution and Fintech.
Managing Partners: Ajay Hattangdi & Vinod Murali
The Alteria Capital India Fund I has a total corpus of Rs. 800 Cr with a green-shoe option of 200 Cr. Alteria is known to provide Venture Debt to high growth startups who have a cheque range of Rs. 2 Cr-10Cr. Alteria has recently announced the second close of Alteria Capital India Fund at 625 Cr. Alteria’s website states that the fund is focussed on innovative startups backed by strong VC sponsors. Their portfolio companies include big names like Wrogn, toppr, Fingerlix and Raw Pressery.
Directors: Ankit Aggarwal & Punit Shah
InnoVen Capital is seen as one of the largest venture debt provider to venture capital-backed start-ups in India. It claims to be the first and the largest venture debt provider in the country. The Fund has a credit rating of ‘IND AA-’ for their term borrowing and ‘IND A1+’ for commercial paper issuances as stated by their website. As stated in this article, Innoven Capital invested around Rs. 477 Cr in 2017 which is growing at an annual rate of 25%. Further, in 2018 they have managed to deploy around Rs. 585 Cr.
The firm is a part of Aavishkaar-Intellecap group and counts the Michael and Susan Dell Foundation, Omidyar Network, fund manager DWM, Triodos Bank, Shell Foundation and Omidyar Network among its investors. Primarily focuses on providing customised debt options to the small & growing businesses of the country. According to an economic times article, IntelleGrow is an NBFC who provides debt to small and growing high-risk companies which are typically based in the social impact sector. It is functioning as a Category II AIF and is worth Rs. 200 Cr.
- Ivvy Cap Ventures
Managing Partners: Vikram Gupta & Ashish Wadhwani
Founded by Vikram Gupta in 2011, IvyCap Ventures has launched their very own debt fund called IvyCap Credit Opportunities Fund-I (“IVCOF”). IVCOF has a targeted corpus of Rs. 500 Cr. Invests in high growth opportunities. Has a system of a monthly coupon (13-17% annual) payments. According to their website, IVCOF is mainly focusing on “potentially high returns, periodic coupons, shorter duration and with managed risks.”
Northern Arc Investments, which is a subsidiary to the Northern Arc Capital was the talk of the town recently with their sixth debt fund, targeting a corpus of Rs. 150 crore with a green shoe option of Rs. 100 crore. This fund is called the IFMR FImpact Income Builder Fund. The fund will focus on investing in sectors like microfinance, small business loan finance, affordable housing, commercial vehicle finance, agri-business and corporate finance in its 3.5 years tenure. Northern Arc Capital rebranded itself from IFMR Capital rebranded in 2018. The company mainly focuses on NBFCs working among financially excluded households and businesses with investors in existing and emerging debt capital markets.