Trifecta Capital launches third fund with target corpus of Rs 1,000 cr

Trifecta Capital has announced the launch of its third venture debt fund, Trifecta Venture Debt Fund – III with a target corpus of Rs 1000 crore ($133 million) and a green shoe option of Rs 500 crore ($67 million). This will be the largest in the series of venture debt funds managed by the firm.

The fund aims to serve the rapidly growing financing opportunities for Indian start-ups. This sunrise sector has attracted US $26 billion in equity financing in the first eight months of 2021.

“We will strengthen our existing investor relationships and selectively add new investors who can add value to our portfolio companies. We aim to further enhance our track record of delivering consistent returns every quarter as well as best-in-class venture debt fund returns to our investors, as we help them participate in some of the most exciting new businesses in India,” said Rahul Khanna, managing partner.

Trifecta Capital pioneered the asset class of venture debt funds in 2015, by financing early growth and growth stage start-ups via the country’s first venture debt fund. This fund is now in its 7th year and has delivered consistent returns on a quarterly basis through some very challenging years for the Indian economy. Trifecta Venture Debt Fund – I has returned 100% of the corpus to its investors and is now harvesting the capital gains from the equity options that it holds across most portfolio companies.

Trifecta Capital has built systems and processes, underwriting frameworks and grading methodologies that has allowed it to make 140 investments over the last 6 years. Trifecta Capital’s venture debt funds have invested approximately Rs 2,200 crore (US $293 million) in more than 85 start-ups. The Trifecta Venture Debt Fund’s portfolio now has 11 Unicorns and more than 15 Soonicorns, with marquee businesses including Big Basket, Pharmeasy, Cars24, Vedantu, Infra.Market, ShareChat, Dailyhunt, UrbanCompany, CarDekho, Blackbuck, Ninjacart, NoBroker, Kreditbee, Dehaat, Turtlemint, Servify, Livspace and BharatPe amongst several others. The portfolio is cumulatively valued at $33 billion.

“In our two existing venture debt funds, we have been extremely selective on the companies that we have chosen to partner with, and creative in how we structure solutions to serve them. The quality of our portfolio is testament to this approach, as we invested in less than 1 out of 10 opportunities that we evaluated, and now have a portfolio with more than 20 unicorns and soonicorns. In this new fund, we will continue to select the very best, and further innovate on the right credit products for them, as we are strong believers in the potential of these businesses to scale and contribute to nation building,” added Nilesh Kothari, managing partner.