India’s Alteria Capital closes third fund at $180 million

By M. Sriram

MUMBAI (Reuters) – India’s Alteria Capital said on Thursday it has raised 15.5 billion rupees ($186.05 million) for its third fund, bolstering its ability to lend to startups which have historically boomed but are now struggling to find backers.

Alteria, founded by former executives of Temasek-backed InnoVen Capital, has backed more than 180 Indian startups in the last seven years, including several multi-billion dollar firms. Some of its investments include grocery delivery firm Zepto and cloud kitchen Rebel Foods.

Alteria operates in the smaller, but fast-growing venture debt segment, where certain funds lend exclusively to startups – a sector banks and large lenders often avoid.

These venture debt funds get a tiny equity stake in these startups as well as repayment of the debt, helping enhance returns for their investors.

Alteria said it has raised the money from Indian institutions and large family offices but did not disclose investors’ names.

It plans to invest up to 2 billion rupees per company from the new fund.

“India’s innovation economy is at a pivotal juncture as we emerge from the challenges of a harsh funding winter. With every corrective phase, the startup ecosystem matures, emerges larger and stronger than before,” Alteria Managing Partner Ankit Agarwal said.

Alteria, which now manages 43.5 billion rupees in assets across three funds is also launching a “shorter duration scheme” for venture capital, it said.

While startups typically take venture debt for about two years, the newer scheme gives companies the option to borrow money for a few months.

($1 = 83.3130 Indian rupees)

(Reporting by M. Sriram; Editing by Sharon Singleton)

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