Alteria Capital Plans To Accumulate $100 Mn Dry Powder For Its 3rd Venture Debt Fund

Mumbai-based venture debt fund Alteria Capital is reportedly planning to raise between $80 and $100 Mn for Alteria Capital Fund III Scheme A, its third venture debt fund (a shorter duration plan), by FY25.

With this move, the VC firm aims to boost the short-term balance sheet efficiency of select Indian startups, Mint reported, citing Alteria Capital’s cofounder and managing partner Vinod Murali.

The fund will support fintech, consumer, and B2B platforms, especially those with liquidity needs for inventory build-up, receivables and book debts, according to Murali.

Founded by Murali and Ajay Hattangdi in 2017, Alteria Capital manages about INR 4,250 Cr across three funds. It boasts a portfolio of more than 170 companies. Some of the noteworthy names in its folio include Rebel Foods, Spinny, Mensa Brands, One Card, Zepto, Dealshare, and Good Glamm Group.

In 2022, the venture debt fund announced the first close of its INR 1,000 Cr debt fund with participation from large family offices, senior professionals, founders, and other stakeholders from the startup ecosystem.

Alteria Capital Fund III Scheme A consists of two distinct schemes — a venture debt scheme with about $180 Mn to $200 Mn and a shorter duration scheme tailored to provide working capital solutions to startups. 

“The two sleeves of capital will have different returns for investors as the shorter duration scheme is intended to be cheaper for founders and hence will target 13-14% return for LPs. Hence, there are two different schemes,” Alteria’s managing partner Punit Shah said.

Earlier this week, Alteria Capital infused INR 120 Cr ($14.4 Mn) into OneCard’s parent entity FPL Technologies.

The latest development comes at a time when India’s funding landscape is experiencing a dry spell, which has prompted many investors to tread cautiously.

Marked by a confluence of economic downturn and funding constraints, the year 2023 has proven to be a challenging one for the Indian startup ecosystem on many fronts. 

Even late and growth stage ventures bore the brunt of the funding crunch, with new fund launches by venture capital firms decreasing both in total value and the number of fresh funds.

The year 2023 saw the announcement and launch of 64 funds, including venture capital funds, micro-funds, and corporate VC funds. These funds amounted to over $5.6 Bn. In comparison, 2022 witnessed the launch of 126 funds, raising over $18 Bn for startup investments.

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