Trifecta Capital Closes Venture Debt Fund-II At INR 1,025 Cr

With a provision to recycle capital, the fund will have an investible corpus of up to INR 2,560 crore

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Alternate financing platform for startups Trifecta Capital announced on Friday that Trifecta Venture Debt Fund-II, its’ second venture debt fund launched in March 2019, has been oversubscribed in its final closing. The fund, with a target of $137 million, including a greenshoe option of INR 250 crore, received investor commitments of $140 million.

Trifecta Capital

This was driven by the performance of both Fund-I and II managed by the firm, as well as the leadership position that Trifecta Capital has achieved in this emerging asset class. Trifecta Venture Debt Fund-II has already invested $123 million across 38 companies and with a provision to recycle capital, will have an investible corpus of up to $350 million.

 “Successfully closing Fund-II during these challenging times is evidence of the performance of our funds and the maturity of the asset class which we pioneered in 2014. Besides consistently beating the quarterly hurdle on returns for over five years across both funds, we have returned a significant portion of our first Fund to investors and are building a strong foundation for the future. We are grateful to our investors for their continued support,” said Rahul Khanna, managing partner, Trifecta Capital.

It has launched the country’s first venture-debt fund in 2014 with commitments of $68 million. This fund, now in its sixth year, has already returned over three-quarters of its capital to its investors and is likely to return 100 percent of the capital by June 2021. Across the two Funds, Trifecta Capital has invested approximately $274 million in 72 early growth and growth-stage startups.

“For Trifecta Capital, founders come first. We are motivated by the success of our portfolio companies and continue to innovate with financing structures around different use cases, be it working capital, inventory, growth, or acquisition financing. Our solution-oriented approach to financing as well as our deep commitment to helping grow our portfolio companies has been a key differentiator for Trifecta Capital,” shared Nilesh Kothari, managing partner, Trifecta Capital.

Its funds are predominantly backed by institutional investors including banks, insurance companies, development institutions, public sector entities, corporates, and endowments, from India and offshore, as well as some of India’s family offices. 

"One of our best financial decisions we took early in Livspace's journey was to partner with Trifecta Capital. Most importantly, the team has infectious energy which rubs off on ours', they are very responsive and optimize for speed which is very important to us, and, unlike any other, the team has the capability to add value beyond the day-to-day given their industry connects, understanding of various asset classes and overall understanding of how high growth companies evolve. Their second Fund closing positions them well to support many businesses like ours. Above all, we deeply value Livspace's relationship with Trifecta and how we have worked together through multiple stages of our business and look forward to even greater times ahead," explained Anuj Srivastava, founder, Livspace.

Nine of its portfolio companies have become Unicorns and several others are likely to achieve a billion-dollar valuation in the next 12 months.

The portfolio companies include Big Basket, Pharmeasy, Cars24, Vedantu, Infra.Market, ShareChat, Dailyhunt, UrbanCompany, CureFit, CarDekho, Blackbuck, Ninjacart, NoBroker, Kreditbee, Dehaat, Turtlemint, Livspace, and BharatPe amongst several others. The Trifecta Capital portfolio has cumulatively raised $8.1 billion of equity and is cumulatively valued at $20 billion.

“We have had a long and fruitful relationship with Trifecta Capital since 2017. They are very thoughtful partners and show tremendous flexibility in working with startups. They understand our business well and are always eager to help with their excellent industry relationships. We value Nilesh's counsel and his unique approach to thinking through our capital needs for capex and working capital. Having raised more than INR 160 crores of debt from them over the years, I'm personally impressed with their speed and responsiveness at every stage. As our business scaled multifold, we could invest the right kind of capital behind warehouses and supply chains prudently, which has helped us manage equity dilution and improve ROE and returns for our investors. We would be glad to continue to work with them in the future as well,” asserted Vipul Parekh, co-founder, Big Basket.

Contingent fee-based structures, on-demand short-term credit for flexible financing of working capital, special facilities for SaaS companies include some of the key new products launched in the last few years to complement the core term-based offering of venture debt. Further, it also helps startups with banking products which are offered through a large number of partnerships with banks and NBFCs; and further introduces them to partnership opportunities with their network of large corporate relationships.

“We have had a relationship with Trifecta Capital since its founding days and it has helped us understand the dynamic startup environment in India. Trifecta Capital, and the involvement of investors like RBL Bank, broadens the availability of capital, both venture and senior debt. Together, we bring an array of modern treasury; working capital, and payment services that can help startups grow their businesses and also address a diverse set of financial needs. With Trifecta Capital, we get a window into the world of a diverse set of startups, investment themes, and VC trends. We are excited as we extend our partnership to this second Fund as well,” added Rajeev Ahuja, executive director, RBL Bank.

Trifecta Capital will be launching its third Venture Debt Fund in Q3 2021. The size of this fund is likely to be in the range of $165-2005 million.