Alteria Capital eyes up to $100 mn fundraise for Shorter Duration Fund

livemint.com:

Mint. The fund will support fintech, consumer, and B2B platforms, especially those with liquidity needs for inventory build-up, receivables, and book debts, Murali said. “By creating these two sleeves of debt options for founders, we want to ensure founders are able to meet their short - medium term needs to create strong enterprise value".

The third fund of Alteria consists of two distinct schemes: a venture debt scheme with about $180 million to $200 million, and the shorter duration scheme tailored to provide working capital solutions to startups. Alteria, currently the largest venture debt fund in India, manages assets worth ₹4,250 crore in domestic capital. "The two sleeves of capital will have different returns for investors as the shorter duration scheme is intended to be cheaper for founders and hence will target 13-14% return for LPs.

Hence there are two different schemes," Alteria's managing partner Punit Shah said. In 2022, Alteria announced the first close of its third venture debt fund, which now stands at about ₹1,500 crore. The fund has been instrumental in backing early and growth-stage startups, providing specialty debt solutions with cheque sizes up to ₹150 crore.

Murali emphasized that venture debt complements equity financing. "The fundamental risk that we take for traditional venture debt is, will a startup that we fund be able to raise one more round of equity funding, if they do that in a reasonable period of time, our money is safe...hence the complementarity with equity capital," he explained. This development comes at a time when the Indian startup ecosystem is experiencing a funding downturn, influenced by macroeconomic volatility and a broader economic slowdown.