Ajay Hattangdi and Vinod Murali, who used to be associated with Innoven Capital previously, are the promoters of Alteria Capital, a $154-million (Rs 1000 crore) venture debt fund and the company has just received the go ahead from the regulator SEBI. The capital is expected to be raised through domestic and offshore investors, which could be from family-owned businesses, banks and insurers, apart from financial institutions.
While this route could account for Rs 800 crore, the remaining Rs 200 crore would be raised through the greenshoe option. For the record, Alteria Capital will be a category II alternative investment fund (AIF) with a tenure of seven years, which could possibly be extended by another two years.
It is also being reported that the startup has already received a commitment of around Rs 100 crore from an India-based family office, as anchor investment.
Around 40%-50% of their overall funding, that is Rs 400-500 crore, may be raised by them from now till the end of Marchâ€™2018. They may sew up the remaining before 2018 bows out. Alteria Capital has disclosed that it is in talks with the Small Industries Development Bank of India (SIDBI) and couple of other banks to help them with identifying candidates for potential investments.
On several occasions, banks find some attractive startups with innovative ideas, but cannot complete their lending process due to inherent constraints and regulations. Such cases can be referred to lenders like Alteria Capital and after their due diligence the funds can be deployed fruitfully.
One of the promoters of Alteria also mentioned that as far as the family offices in India are concerned, they find investments in their debt fund attractive to deploy their excess liquidity and they usually generate these out of gold or real estate.
Consumer, technology, healthcare, logistics, education technology and food technology are some of the many sectors in which Alteria Capital plans to make their investments and VC-funded startups will be the focus for series A funding and later stages financial requirements. Alteria also plans to earmark 10% of its corpus to make small equity-based investments on a selective basis. These would be in startups that have already been associated with them in the form of debt financing.
Debt funding suits many startups also, since they do not have to shed their equity holding to borrow funds and some of the well-known startups in India, OYO, Yatra.com and Swiggy have adopted this route.