Venture debt fund Trifecta Capital may see unicorn base doubling in 2 years

The fund currently has nine unicorns in portfolio such as BigBasket, Urban Company Cars24, Rivigo

Venture debt fund Trifecta Capital is all set to add another 10 startups from its portfolio in the unicorn list in the next 24 months.

Some of the firms which may hit the $1 billion valuation club in the next two years include BharatPe, Livspace and Ninjacart. BharatPe, which recently raised $108 million in a Series D equity round at a valuation of $900 million, is set to become the next fintech unicorn in the country. Home interior and renovation startup Livspace is currently valued upwards of $500 million while Walmart-backed B2B supply chain startup Ninjacart has a valuation anywhere between $250 million and $500 million.

“Many of the companies in our portfolio are rising stars and will continue to see growth as they define the categories they’re in. We expect in 24 months the number (of unicorns) will likely double. In our portfolio we are excited about Livspace, Ninjacart and BharatPe which continue to grow and have a lot of appetite for investors,” said Trifecta Capital co-founder and managing partner Rahul Khanna.

Some other category leaders that the platform has bet on include ShareChat, Vedantu, Cure.Fit and CarDekho, which are likely to join the unicorn club soon, according to market estimates. The platform already has nine unicorns in its portfolio such as BigBasket, Urban Company, Rivigo, Cars24 and InfraMarket.

According to an Orios Venture Partners report, the domestic startup ecosystem has seen value worth $106 billion created by 44 unicorns in the past decade.

“We had the good fortune of picking well and that came from our experience in understanding venture capital, understanding the cycles of investment and early signs of category leadership,” said Khanna.

Founded in 2015 and focused on growth stage companies, Trifecta Capital looks at parameters around the unit economics that the startup is demonstrating, the replicability of their business models in terms of scaling up, quality and maturity of the team, and support from high quality equity investors before making a decision on betting on them.

Khanna said while Trifecta Capital has continued to support the cash flow needs of its portfolio startups, it has played the role of a partner in growth. “Over time founders have been seeing us as a partner for knowledge for guidance on investments, exit paths and valuations. We have a large portfolio through which we get a lot of data sets which help in guiding startups in a fashion that is useful to them,” added Khanna.

Venture debt is an additional layer of capital for startups that sits on top of equity funds. Unlike VC funds which only get returns through exit events, the majority of venture debt fund returns come from the interest income earned.

Trifecta Capital, which has invested in 75 startups so far, will be launching its third fund sized Rs 1,200-1,500 crore by the middle of this year. The firm backed by LPs such as the Azim Premji Foundation, RBL Bank and multiple life and general insurance companies, closed its second fund recently which was oversubscribed at Rs 1,025 crore during final closure. Launched in May 2019 with a target of Rs 1,000 crore and a green shoe option of Rs 250 crore, Trifecta Capital has already deployed Rs 900 crore from fund 2 in 38 startups and will be actively investing from it for another 3-3.5 years. It has so far pumped in Rs 2,000 crore in the startup ecosystem.