InnoVen Capital's former executives to launch India's biggest venture debt fund

Ajay Hattangdi and Vinod Murali, former senior executives at Temasek-backed InnoVen Capital are planning to launch India’s biggest venture debt fund Alteria Capital with a corpus of Rs 1000 crore.

As per ET report Alteria Capital will have a corpus of Rs 800 crore with a greenshoe option of raising an additional Rs 200 crore. The company is in the process of registering it with SEBI (Securities and Exchange Board of India) as a category II AIF (Alternative Investment Fund) with a tenure of seven years and a possible extension of two years.

Last August, the regulator modified rules for alternate investment, which further makes it easier for fund managers to float their funds.

Commenting on latest development, Hattangdi said, “The venture debt fund is looking to make the maiden close of the fund by the first quarter of 2018, with a target to raise 25-50% of the corpus (Rs 250-500 crore) to enable deployments around the same period.”

“From an operating standpoint, the AIF is a more efficient vehicle to invest, especially with regard to exits for investors,“ he further added.

With investments of Rs 1500 crore in FY17, the duo had played a vital role at InnoVen in providing debt fund to some of the prominent startups such as, ShopClues, Byju's, Swiggy, OYO Rooms, Practo, Snapdeal and Pepperfry.

Alteria Capital will be India's largest venture debt fund yet with cheque sizes ranging from Rs 3 crore at the series-A level to Rs 100 crore.

Apart from venture debt, a small part of Alteria Capital's fund (less than 10%) will be allocated for selective startups, that have borrowed debt from them in the past.

According to Vinod Murali, “It is more about plugging the rounds so that a series-B or -C round happens faster. We just juice up and improve our returns.”