BusinessWire India
Mumbai (Maharashtra) [India], February 3: Trifecta Capital, India's leading provider of venture debt, has reached a significant milestone with the first close of its fourth and largest venture debt fund till date. This achievement marks a significant milestone in the firm's plan to raise INR 2,000 Crore (including a greenshoe option of INR 500 Crore) for this fund. This also underscores the firm's strong position as a pioneer of the venture debt asset class and the enduring trust it has built within the ecosystem. Notably, many of Trifecta Capital's long-standing investors, partners who have supported the firm since its inception in 2015, have reaffirmed their commitment to the latest venture debt fund, continuing a nearly decade-long relationship. The fund has garnered support from a multitude of capital allocators including insurance companies, leading family offices, and corporate treasuries. "We are incredibly grateful to our investors, both new and old, for their steadfast support and trust in Trifecta Capital. Their commitment to our vision has been instrumental in our success, and we are excited to continue this journey with them as we embark on this new chapter with Venture Debt Fund - IV," said Rahul Khanna, Managing Partner, Trifecta Capital.
Trifecta Capital launched India's first venture debt fund in 2015, laying the foundation for this asset class by offering non-dilutive financing solutions for early and growth-stage new-economy companies that typically cannot access credit from traditional lenders like banks and NBFCs. Trifecta Capital has previously successfully raised three venture debt funds since inception and invested over INR 6,500 Crore (US$ 875 Million) till date. More importantly, it has also generated attractive returns in terms of both IRR and DPI on all these funds.
Venture debt is now well recognized as an asset class for its relatively low-risk profile, predictable quarterly returns, and potential for upside participation within the broader private credit landscape. While it accounts for over 20% of total venture capital financing in mature markets like the US, its penetration in India remains below 5%, signifying a huge opportunity for growth. Over the past decade, as Indian venture capital has matured, venture debt, a complementary asset class, has gained significant momentum, recently surpassing INR 8,000 Crore (approximately US$ 1 Billion) in annual deployment, even during slow periods for venture capital. Trifecta Capital has been a key contributor to this growth, deploying INR 1,200-1,500 Crore annually. The first close of the INR 2,000 Crore Trifecta Venture Debt Fund - IV comes at a pivotal time and is well-positioned to capitalize on the growing potential of India's venture debt ecosystem. "In India, the quick commerce sector experienced a decade's worth of growth compressed into just a couple of years, driven by intense competition from both established players and new entrants. To scale rapidly, we needed flexible capital to build critical elements, such as setting up dark stores, optimizing our logistics network, and managing working capital efficiently. Trifecta Capital proved to be an invaluable partner on our journey, providing flexible financing solutions and drawing on their extensive experience with consumer brands, logistics, and mobility companies to guide our growth," said Aadit Palicha, Co-Founder and CEO, Zepto.
2024 proved to be a transformative year for Trifecta Capital, marked by the expansion of its footprint with new, larger offices in Mumbai and Gurugram, and the growth of its team to over 35 members strong. The year also saw remarkable public market debuts by Trifecta Capital portfolio companies - ixigo, Blackbuck, and Mobikwik - each trading significantly above their IPO valuations, highlighting the firm's portfolio selection capabilities. "The journey to our IPO has been a mix of navigating tough times and seizing opportunities during periods of growth. COVID was undoubtedly the lowest point for our company, but as traffic began recovering post-pandemic, Trifecta Capital stepped in at a critical moment. Their support enabled us to expand our train and bus services, a move that ultimately propelled us to a successful IPO," said Aloke Bajpai, Co-Founder & Group CEO, ixigo.
As Trifecta Capital approaches its 10th anniversary in September 2025, its senior leadership, who have been instrumental in establishing both the firm and the venture debt asset class, are excited about the next generation of leadership talent that has been groomed at the firm. "Our highly experienced investment and operations team has been with us almost since inception and is well-equipped to manage a growing portfolio as we expand our capacity with Fund - IV. We are one of the few firms that have a presence in the key markets of Bangalore, Mumbai, and NCR which allows us to maintain high levels of engagement with our portfolio. This active dialogue with founders enables us to gain insights into their needs and allows us to develop solutions that scale with the businesses," said Abhishek Gupta, Partner, Trifecta Capital.
Through Trifecta Venture Debt Fund - IV, the fund plans to invest in over 100 companies, focusing on sectors spanning Fintech, Electric Vehicles, Consumer Products and Services, Logistics, New Age Manufacturing, B2B services, and Core Tech including Software and Hardware. The fund will also actively explore opportunities in emerging sectors like renewable energy, climate, and sustainability, which are now soliciting mainstream capital and are poised for significant growth in the coming decade. Notably, the firm has invested in Hygenco (a leading green hydrogen company), Euler, and Batterysmart and is evaluating other companies in these sunrise sectors.
Having completed the investment phases of Trifecta Venture Debt Fund - I and Trifecta Venture Debt Fund - II, Trifecta Capital has returned a significant portion of capital to investors while generating consistent returns over the past nine years. Currently, the firm is actively recycling capital from Trifecta Venture Debt Fund - III, following its full drawdown. Across its venture debt funds, total credit costs have been managed at less than 0.8%, despite disruptions to the start-up ecosystem caused by demonetization, GST rollout, COVID-19, geo-political conflicts, and funding slowdowns. Furthermore, the aggregate capital gains from equity options across the funds exceed INR 700 Crore, resulting in zero capital loss to any investor and providing a significant positive impact on fund returns. "Investors have appreciated Trifecta Capital's venture debt funds for their ability to protect capital through strong underwriting and innovative structuring, regular income distributions, consistency of returns, equity upside, and tax efficiency. The funds have been a key part of their fixed-income income allocations and continue to be attractive relative to other private credit opportunities," said Nilesh Kothari, Managing Partner, Trifecta Capital.
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