Trifecta Capital, a leading venture debt firm in India, has achieved the first close of its fourth and largest venture debt fund with a target corpus of Rs 2,000 crore. This fund includes a greenshoe option of Rs 500 crore and marks an important milestone for the firm as it continues to expand its footprint in the venture debt space.
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PC: Startup Story
Fund Objectives and Strategy
Fund IV targets more than 100 investments across industries such as fintech, electric vehicles, consumer products and services, logistics, new age manufacturing, B2B services, software and hardware technology. Besides these, Trifecta Capital also looks at emerging opportunities around renewable energy, climate, and sustainability that attract mainstream capital and are growing significantly in the next ten years.
Background and Track Record
Founded in 2015 by Nilesh Kothari and Khanna, Trifecta Capital has established itself as a key player in the venture debt ecosystem, having invested in over 30 unicorns such as Meesho, Zepto, and Urban Company. So far, the firm has deployed over Rs 6,500 crore in capital across its previous funds, showing a strong track record of generating attractive returns for its investors.
Market Context
Trifecta Capital operates in a competitive landscape along with other venture debt firms such as Alteria Capital and Stride Ventures. The venture debt market has gained traction in India, particularly as startups seek non-dilutive financing options to fuel their growth without sacrificing equity. The firm’s ability to provide strong underwriting, innovative structuring, and regular income distributions has made its funds appealing to investors looking for fixed-income allocations.
Investor Sentiment
The firm reported that investors have shown keen interest in its venture debt funds, appreciating their capacity to protect capital while offering equity upside and tax efficiency. Kothari, the managing partner, said that the funds have become part of investors’ fixed-income portfolios, especially when compared to other private credit opportunities.
Future Prospects
As Trifecta Capital forges ahead with Fund IV, it is also recycling capital from its previous funds, especially Fund III, which has been fully drawn down. The firm continues to build momentum in the venture debt space through extensive experience and established relationships in the startup ecosystem.
In conclusion, the first close of Trifecta Capital’s Rs 2,000 crore Fund IV reflects not only the growth ambitions of the firm but also the rapidly growing appetite for venture debt in India’s financial landscape. Its focus on multiple sectors and a commitment to sustainability positions Trifecta Capital as a firm which is well-set to take on emerging opportunities.