(VC) Venture capital debt provider Alteria Capital, backing Mensa Brands and Dunzo, launched a third fund with an initial closing of Rs 100 billion, driven primarily by concessional arrangements from domestic investors and institutions.
“While there’s a demand for venture debt, we do not see the market doubling or tripling. It will still be linear growth, even as equity investments degrow this year,” said Vinod Murali, co-founder, and managing partner, of Alteria Capital.
“From a supply of capital perspective, we felt that our new 3A fund or the venture debt scheme A fund should be ideally at the same size as our previous fund. A couple of thousand crores is good from an exit perspective. If there’s more demand, then there will be a shorter duration between new funds,” Murali added.
The venture fund took the entire corpus from the second fund and invested in startups. He continues to process capital from the second fund. Alteria seeks to close 120-150 deals with Fund III, recording an average check size of Rs 20-22 crore, almost identical to the previous fund.
Fund III came at a time when investment in Indian startup stocks stagnated as global tech stocks plummeted as global inflationary pressures and fears of high-interest rates squeezed public markets.
In the nine months to September 30, total private equity and venture capital investment in Indian startups dropped to $20.4 billion from $24.8 billion in the exact course of the final year. According to Venture Intelligence, in the third quarter of July-September, total funding fell nearly 77% to $2.7 billion from $11.9 billion in the same period a year earlier.
Alteria has received the necessary approvals for a separate fund from the Securities and Exchange Commission of India, which regulates capital markets.
