Alteria Capital Successfully Closes Oversubscribed Fund III at Rs 1,550 Crore

• ByStartupStory     |    March 28, 2024

Alteria Capital, a leading venture debt firm headquartered in Mumbai, proudly announced today the final close of its third fund, Alteria Capital Fund III, at an impressive Rs 1,550 crore. The fund, which had a target size of Rs 1,000 crore along with a green shoe option, witnessed significant oversubscription, reflecting investor confidence in Alteria’s vision and track record.

Vinod Murali, Co-founder and Managing Partner of Alteria Capital, expressed his enthusiasm, stating, “We are thrilled to have closed our third fund at Rs 1,550 crore, surpassing our initial target. This achievement underscores the trust our investors place in our ability to identify and support promising startups.”

Alteria Capital’s Fund III embraces a twin scheme strategy, comprising a venture debt scheme and a shorter duration scheme, aimed at catering to the diverse working capital requirements of startups. Murali elaborated on this strategy, saying, “The shorter duration scheme is part of our third fund, which will include all transactions with a tenor of less than 18 months, a key differentiator from the venture debt rounds with deal tenors of up to 36 months.”

He further added, “The short duration scheme aims to solve for balance sheet efficiency, implying that we will be financing inventory investments or receivables build-up. This will also help fintechs with capital to build their loan books.”

The venture debt scheme, which closed at $195 million (Rs 1,550 crore at a conversion rate of Rs 80 per dollar), has already deployed 50% of its total capital across over 70 startups. Notable investments include One Card, Renee Cosmetics, Samunnati, Bliss Club, Rebel Foods, Giva, Lead School, and Bluestone, among others.

Highlighting the significance of the shorter duration scheme, Murali stated, “The Alteria Capital Fund III-Shorter Duration Scheme will have a timeline of three-and-a-half years for investors to get their capital back and cross the fund hurdle. The fund will have an additional two and a half years to monetize any equity upside as appropriate.”

The third fund, denominated in rupees, boasts an average cheque size of Rs 200 crore and has attracted nearly 50% of its capital from existing investors. It will continue to support startups across various sectors including consumer brands, ecommerce, fintech, logistics, business-to-business platforms, rural and agritech, healthcare, and climate tech. Additionally, it will explore opportunities in the Gen AI and spacetech segments.

Founded in 2018, Alteria Capital has swiftly emerged as a key player in the venture debt space, with assets under management (AUM) totaling Rs 4,350 crore across three funds. In 2023 alone, the firm backed an impressive 107 venture debt deals, underscoring its commitment to fostering innovation and entrepreneurship in the Indian startup ecosystem.

With the successful closure of Fund III, Alteria Capital is poised to further accelerate its mission of empowering startups to reach new heights of success, driving economic growth and innovation in the process.

The shorter duration scheme is expected to see its final close by the end of 2024, offering portfolio companies with cheque sizes ranging between Rs 3 crore and Rs 100 crore a unique opportunity to enhance their operational efficiency and fuel their growth trajectory.

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