Alteria Capital eyes up to $100 mn fundraise for Shorter Duration Fund

Bengaluru: Venture debt fund Alteria Capital plans to raise $80 million to $100 million for the Shorter Duration Scheme of its third fund by the next quarter. This initiative aims to enhance the short term balance sheet efficiency of startups in some focussed sectors, the company's co founder and managing partner Vinod Murali told .

The fund will support fintech, consumer, and B2B platforms, especially those with liquidity needs for inventory build up, receivables, and book debts, Murali said. “By creating these two sleeves of debt options for founders, we want to ensure founders are able to meet their short medium term needs to create strong enterprise value".

The third fund of Alteria consists of two distinct schemes: a venture debt scheme with about $180 million to $200 million, and the shorter duration scheme tailored to provide working capital solutions to startups. Alteria, currently the largest venture debt fund in India, manages assets worth 4,250 crore in domestic capital.

"The two sleeves of capital will have different returns for investors as the shorter duration scheme is intended to be cheaper for founders and hence will target 13 14% return for LPs. Hence there are two different schemes," Alteria's managing partner Punit Shah said. In 2022, Alteria announced the first close of its third venture debt fund, which now stands at about 1,500 crore.

The fund has been instrumental in backing early and growth stage startups, providing specialty debt solutions with cheque sizes up to 150 crore. Murali emphasized that venture debt complements equity financing. "The fundamental risk that we take for traditional venture debt is, will a startup that we fund be able to raise one more round of equity funding, if they do that in a reasonable period of time, our money is safe...hence the complementarity with equity capital," he explained.

This development comes at a time when the Indian startup ecosystem is experiencing a funding downturn, influenced by macroeconomic volatility and a broader economic slowdown. This has led investors to adopt a more cautious stance. Earlier this week, Alteria invested 120 crore in venture debt in FPL Technologies, the parent company of mobile first credit card startup OneCard.

Alteria has consistently focused on domestic consumption, with 40 45% of its portfolio in the consumer, F&B, and e commerce sectors. It has 35 40% of its investments in other areas such as fintech, logistics, B2B platforms, and rural and agritech sectors. Founded in 2017, Alteria has been a pioneer in venture debt in India, funding over 250 startups in 15 years.

Its impressive portfolio includes names like Rebel Foods, Dealshare, Spinny, Mensa Brands, BharatPe, Cars24, Good Glamm Group, Niyo, Zepto, Lendingkart, and Portea, among others. Livemint tops charts as the fastest growing news website in the world to know more. Unlock a world of Benefits! From insightful newsletters to real time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away!.