Alteria Capital hits first close of maiden fund at $55 million

Venture debt firm Alteria Capital has hit the first close of its maiden venture debt fund with $55 million in capital commitments.

Founded by former InnoVen Capital executives Ajay Hattangdi and Vinod Murali, the investment firm floated its Alteria Capital India Fund I venture debt fund last year with a targeted corpus of $123 million and a greenshoe option of $31 million.

The founders of Alteria worked together for over a decade and were instrumental in setting up and growing the India operations of InnoVen Capital. Alteria has received commitments from institutional investors and family offices for its maiden fund.

IndusInd Bank and a large undisclosed family office foundation are anchor investors in the fund, Vinod Murali, Managing Partner, Alteria Capital told DEALSTREETASIA.

The company is targeting to reach a final close for the fund in the second half of this calendar year. With its first close achieved, Alteria is gearing up to close its first two deals by the end of March said Murali. "While we are raising about Rs 10 billion, we will end up deploying around Rs 18 billion -20 billion over the next four years, because we can recycle capital for four years. In the first year, we expect to deploy Rs 3.0-3.5 billion over the next 12 months," he said.

The fund will target startups across early and growth stages with cheque sizes up to Rs. 1.0 billion. The median deal size is expected to be around Rs 250-300 million.

The fundraising was supported by Avendus Wealth in placement to the domestic family office segment of investors. Venture debt is now proving to be more attractive for startups looking for interim funding without giving up equity. Temasek-backed InnoVen is one of the larger funds in the market. Other venture debt providers in the market include Trifecta Capital, which is also on the road to close its $74-million fund, and IntelleGrow. Apart from Alteria, venture capital firm IvyCap also announced its plans to launch a $76.4-million venture debt fund last year, while in November last year, Unicorn India launched its $92-million venture debt fund. Commenting on the growing competition in the venture debt space, Murali said, "There's definitely more interest in this space. There are more players that are keen to launch their own funds. It's a function of two-three things, first that it's an opportunity that clearly works. It's a market which is now visible."