Alteria Capital announces final close of oversubscribed third fund

Venture debt platform Alteria Capital on Wednesday announced the final close of its third fund. The firm had adopted a twin scheme strategy as part of its Alteria Fund III, which includes a Venture Debt Scheme and a Shorter Duration Scheme to cater to “multivariate capital needs of Indian founders.”

Its Venture Debt Scheme has been significantly oversubscribed with a final close at Rs 1,550 crore (roughly 186 million dollars), while the Shorter Duration Scheme has been opened for subscription with a final close expected by the end of 2024. The fund is expected to raise 250-300 million dollars in aggregate across both schemes.

“We are constantly learning from our founders to adapt to their evolving capital needs, and the strategy to split our fund into two schemes with different propositions arises from the fact that start-ups need innovative solutions across different use cases, tenures, and price points,” said Vinod Murali, co-founder and managing partner, Alteria Capital.

The Venture Debt Scheme had a target size of Rs 1,000 crore, with a green shoe option which has been significantly oversubscribed. Furthermore, more than half the fund was contributed by existing investors.

According to Punit Shah, managing partner, Alteria Capital, the Shorter Duration Scheme will focus on filling a wide gap that exists for companies that have short-term cash flow mismatches within their operating cycles “as well as playing a central role in providing capital to fintech companies for bolstering their on-lending needs.”

Despite macroeconomic volatility, there has been strong interest from domestic investors to participate in this attractive asset class including institutions as well as large family offices, senior professionals, founders and other stakeholders from the start-up ecosystem, the firm said in a statement.

This scheme will continue to back start-ups that have already raised venture capital funding and provide them with a range of specialty debt solutions up to Rs 200 crore per company. Alteria has raised almost all its capital from domestic investors.

The fund has already deployed as much as 50 per cent of the total capital commitments. Portfolio companies of this fund include One Card, Renee Cosmetics, Samunnati, Bliss Club, Rebel Foods, Giva, Lead School, Kissht, Captain Fresh, Traya, Bluestone and Ather.

With assets under management (AUM) of Rs 4,350 crore – roughly 522 million dollars – across three funds, Alteria manages the largest pool of capital for venture debt for Indian start-ups currently. It has made investments in over 180 companies such as the likes of Rebel Foods, Spinny, Mensa Brands, Infra.market, Dealshare, BharatPe, Zepto, Dunzo, and Curefoods, among others.