The Fund aims to serve the fast-growing demand for growth and acquisition financing in Indian startups.
Trifecta Capital announced that it has achieved the first close of its third venture debt fund, Trifecta Venture Debt Fund – III, having secured investor commitments of Rs. 750 crores within 2 months of the launch of the Fund. The Fund, with a target corpus of Rs. 1,000 crores and a green shoe option of Rs. 500 crores, is the largest in the series of venture debt funds managed by the firm. Strong interest from domestic and global investors is being seen for the Fund, as Trifecta Capital has demonstrated a robust track record across both its prior venture debt funds. The Fund aims to serve the fast-growing demand for growth and acquisition financing in Indian startups. This sunrise sector has seen 35 new entrants to the Unicorn club in 2021 and has attracted US$ 35 billion in equity financing in 2021 till date.
The rapid first close achieved by Trifecta Venture Debt Fund – III, primarily through remote fundraising, is testimony to the deep confidence that investors have placed in the Trifecta Capital team based on its robust investment track record across both its prior funds. Backed by this distinctive track record, Trifecta Capital continues to witness strong interest from both new investors as well as investors in its prior funds which include Banks, Insurance companies, Development Financial Institutions, Corporates, Endowments, and some of India’s largest Family Offices.
Earlier this year, the firm had announced the final close and oversubscription of Trifecta Venture Debt Fund – II at Rs 1025 crores, as well as the first close of its late-stage equity offering, the Rs. 1,500 crores Trifecta Leaders Fund – I. With the first close of Trifecta Venture Debt Fund – III, the firm is uniquely positioned among providers of venture debt with three active debt funds and one active equity fund, along with high quality advisory services, to support the diverse needs of startups across their lifecycle.
Trifecta Capital pioneered the nascent asset class of venture debt funds in 2015 with Trifecta Venture Debt Fund – I. This fund is now in its 7th year and has delivered consistent returns on a quarterly basis through some very challenging years for the Indian economy. It has returned 100% of the capital to its investors, and is now focused on harvesting the capital gains from the equity options that it holds across its portfolio companies. The Venture Debt fund model introduced by the Firm in India has now evolved into the standard for startup financing, and has been widely adopted by every single provider across the industry. The industry itself has grown multi-fold, as the entire startup ecosystem has begun engaging more deeply with a variety of alternate financing options.
Trifecta Capital has committed over Rs. 2,700 crores of credit in 85+ startups across its prior debt funds, and an additional Rs. 750 crores of equity in 7 startups from its equity fund. Its portfolio now has 15 unicorns and more than 12 soonicorns, with marquee businesses including Big Basket, Pharmeasy, Cars24, Infra.Market, ShareChat, Dailyhunt, Urban Company, Vedantu, The Good Glamm Group, CarDekho, Blackbuck, Ninjacart, NoBroker, Dehaat, Turtlemint, Servify, Livspace, CureFit, Meesho, Ixigo, Mobikwik, Builder.ai and BharatPe amongst several others. The Trifecta Capital portfolio has cumulatively raised US$ 9.5 billion of equity and is cumulatively valued at US$ 40 billion.
Across its three verticals, Trifecta Capital has built a diverse team of investment professionals with a depth of experience in building and investing in start-ups. It will continue its focus on prudently selecting market leaders and early category creators for the planned investments from Trifecta Venture Debt Fund – III. It will offer customised solutions woven around growth financing, with creative mechanisms of risk sharing, working capital financing for inventory and receivables, bespoke capital structured to fund acquisitions, as well as blended financing structures along with participation from Banks and NBFCs.
The firm additionally aims to utilize the capital pool to continue backing portfolio companies farther into their growth journey, through multiple follow-on investments and the ability to underwrite larger investments. Focus sectors where the firm plans to enhance participation include emerging sectors with high growth prospects such as SaaS (Software as a Service), D2C (Direct-to-consumer), B2B commerce, Fintech, E-commerce Sellers, etc. Trifecta Capital aims to complete the final close for this fund in Q1 2022. It has begun active deployment from this vehicle, having already identified a healthy pipeline of credit opportunities.
Rahul Khanna, Managing Partner said, “We are thankful to our investors for their commitments to Trifecta Venture Debt Fund – III. It is rare to raise two Funds in the same year, and we have been fortunate to do it thanks to our investors, our team, our portfolio partners, and our friends from the venture capital industry. We will endeavor to deliver consistent and healthy returns from this Fund as well.”
Nilesh Kothari, Managing Partner added, “Equipped with Venture Debt Fund – III, a customized technology platform offering financial advisory solutions and a late-stage equity fund, Trifecta Capital aims to consolidate its position as an innovator and financial partner of choice for the rapidly growing start-up ecosystem. Over the next two years, we will continue to introduce more interesting products and services to solve for large gaps within this ecosystem.”
Source: Business World