Alteria raises Rs 960 cr in maiden funding from IndusInd, SIDBI and others

Alteria Capital, a home-grown venture debt player, has raised Rs 960 crore (or $140 million) in its maiden fund to back high-growth start-ups at a time when venture debt is attracting investors looking to grow their capital, and entrepreneurs.

Those who invested in the fund are IndusInd Bank, Small Industries Development Bank of India (through fund of funds), Azim Premji Foundation, and Kiran Reddy, the founder of Chennai-based multiplex chain SPI Cinemas, among others. Flipkart co-founder Binny Bansal has also invested in the fund. Several other family offices and domestic banks have invested, names of which have not been revealed.

Alteria Capital is promoted by Ajay Hattangdi and Vinod Murali, who were earlier leading InnoVen Capital. It announced the fund in 2017 and received the approval from the Securities and Exchange Commission of India in October that year. It targeted a raise of Rs 800 crore, with a green shoe option of Rs 200 crore.

The founders said the entire capital was raised locally, making Alteria Capital the largest such fund supported by only domestic investors. “The fact that we raised this entire fund from domestic capital speaks about the fact that LPs are now beginning the asset class and what it means,” said Hattangdi.

Alteria Capital is part of a growing ecosystem of venture debt providers, which include players such as Trifecta Capital and InnoVen Capital. In May, InnoVen Capital said it raised $200 million from Singapore’s government investment firm Temasek and United Overseas Bank, its primary investors, while Trifecta is raising its second fund of Rs 800 crore.

In the two years since it started out, Alteria Capital has invested Rs 540 crore across 28 transactions. Another Rs 75 crore has been committed across various deals. The founder said they expect to completely deploy the fund in 18 months, and may start work on fund II sometime next year.

Alteria Capital’s portfolio includes Faasos, Lendingkart, ZestMoney, Vogo, Toppr, Raw Pressery, Universal Sportsbiz, Dunzo, Stanza Living, Portea, Fingerlix, mfine, Loadshare, Country Delight, Spinny, LimeTray, and Vinculum.

“Venture debt is now an integral part of funding rounds for start-ups across stages and sectors. There is better awareness of how the product can be utilised by start-ups as well as the expectation on returns for investors into the fund,” said Murali, co-founder and managing partner.

“Since we have the ability to recycle capital, we will end up deploying approximately Rs 1,800 crore from this fund and we are seeing a very strong pipeline of startups across technology, health care, and consumer segments to absorb this capital over the next couple of years,” he said.

Murali and Hattangdi had set up SVB India Finance, a subsidiary of Nasdaq-listed SVB Financial Group, in 2008 and expanded the business into South East Asia. The firm was later taken over by Temasek, Singapore’s sovereign wealth fund, and United Overseas Bank, in 2015 and rechristened InnoVen Capital.

Lendingkart raises Rs 80 crore in debt funding from Alteria Capital

Start-ups focused debt firm Alteria Capital has infused Rs 80 crore in digital lending firm Lendingkart. In a statement issued on Sunday, the Mumbai-based debt fund company said that the investment was made in the non-banking financial arm of Ledingkart, in the form of venture debt. This also marks the largest deal by the company.

Alteria Capital, which competes with InnoVen Capital and Trifecta, is one of the leading players in India’s venture debt market. The firm launched in 2016 and is investing from a 1,000-crore fund, of which it has raised Rs 625 crore.

In a short time, Alteria Capital has backed a large number of mid-tier start-ups such as Faasos, Portea Medical, Raw Pressery, Vogo Bikes, Dunzo, Mfine, Zest Money and Stanza Living, among others. Its typical cheque size is Rs 5 crore Rs 80 crore.

“The last few quarters have witnessed a lot of volatility in the NBFC space but the companies which have robust underwriting platforms and a strong equity cushion have been able to turn this into an opportunity for growth. While liquidity has not been easily available for the broader market, Lendingkart has grown sharply during this phase,” said Vinod Murali, managing partner, Alteria Capital.

Lendingkart is part of a new group of start-ups that includes Capital Float, Neogrowth and IndiaLends, that offer small ticket-size loans, mostly unsecured credit, to borrowers with limited credit history.

The company operates through two divisions- a non-banking financial entity, Lendingkart Finance, and technology support arm, Lendingkart Technologies. The company focusses on small and medium enterprises (SMEs) with the ability to service deals pan-India.

To support the NBFC business, the start-up raises debt from the market on an on-going basis. Some of its investors include Yes Bank Ltd and Aditya Birla Financial Services, among others. Lendingkart has also taken debt from the State Bank of India, in what is the first such deal in a digital lending start-up by the state-owned bank.

Most of the equity is infused in Lendingkart technologies which owns the credit underwriting intellectual property. In February last year, the company has closed $76 million (a little less than Rs 500 crore) in series-C funding led by Fullerton Financial, the wholly-owned subsidiary of Temasek Holdings, and some of its existing investors. Other investors in the firm include Sistema Asia Fund, Bertelsmann India Investment, Mayfield India, Saama Capital and India Quotient.

"MSMEs have traditionally faced huge hurdles in growing their businesses. Our goal at Lendingkart is to help them succeed by fulfilling their financial needs. The funds raised will be used to grow our ability to service the MSME community across the country and bring them into the financial mainstream," said Lendingkart’s co-founder and chief executive, Harshvardhan Lunia.