Trifecta Capital, the pioneer of venture debt funds in India, has launched its largest fund yet - Trifecta Venture Debt Fund IV, with a target corpus of INR 2000 crores. This milestone comes as Trifecta Capital celebrate surpassing INR 6000 crores in investments across more than 180 startups through the three previous venture debt funds since 2015. Over 50 startups have achieved unicorn/soonicorn status and are recognised as category leaders including Atomberg, BigBasket, BlueStone, Country Delight, Cars24, Cashfree, Curefit, DailyHunt, GlobalBees, Infra.Market, Livspace, Meesho, PaperBoat, UrbanCompany, Zolve and Zepto.
“We have been steadfast in our support of the startup ecosystem despite all the challenges that the market has seen since 2015. Our focus on great founders, category-leading businesses with sound unit economics, and strong equity investor backing has helped establish best practices in the industry and enabled the strong growth of this asset class,” said Rahul Khanna, Managing Partner, Trifecta Capital.
Trifecta Capital has so far raised three venture debt funds, all of which were oversubscribed:
Trifecta Venture Debt Fund I of INR 500 Crores
Trifecta Venture Debt Fund II of INR 1,024 Crores
Trifecta Venture Debt Fund III of INR 1,777 Crores
While the Indian venture capital industry is over 20 years old, venture debt, a companion asset class, is only 10 years old. Trifecta Capital launched India’s first venture debt fund in 2015 and laid the foundation for this asset class by providing non-dilutive financing solutions for early and growth-stage companies that typically cannot access credit from traditional lenders like banks and NBFCs. Investors in this asset class appreciate its relatively low-risk profile, predictable quarterly returns, and upside participation.
On the back of the success of its previous three venture debt Funds, Trifecta Capital has recently launched Venture Debt Fund IV with a target size of INR 2,000 crores (including a greenshoe of INR 500 crores) and is seeing a good response from existing and new investors. The firm expects continued investment from its LPs, despite the volatility in the global startup ecosystem over the last three years. “We are grateful to all our investors for the support over the last nine years and look forward to delivering strong returns. We also want to recognize the efforts of our investment teams across Mumbai, Bengaluru, and NCR who have focussed on delivering best-in-class returns while prioritising capital preservation, a critical element of this asset class,” said Nilesh Kothari, Managing Partner, Trifecta Capital.
Investing INR 6,000 crores in venture debt marks a significant milestone in the firm’s almost decade-long journey, solidifying its reputation as the preferred provider of non-dilutive, founder-friendly capital through the lifecycle of a startup. This has been further validated by companies that were supported through challenging times like covid and the equity financing slowdown over the last couple of years. “During the post-Covid recovery phase, our traffic was on the rise but hadn't yet reached pre-pandemic levels. The chance to expand our train and bus services was pivotal for us, but the equity valuations we were receiving reflected the market's cautious optimism. Trifecta Capital provided the venture debt we needed at a critical juncture, allowing us to take advantage of acquisition opportunities and drive our growth forward," said Aloke Bajpai, Co-Founder & Group CEO, ixigo.
Trifecta Capital has garnered support from large family offices, insurance companies, banks, financial institutions, corporate treasuries, endowment funds, and development financial institutions.
Having completed the investment phase of Trifecta Venture Debt Fund I and Trifecta Venture Debt Fund II, the firm has returned a significant portion of capital and generated consistent returns for nine years. Trifecta Capital is also actively recycling capital from its Venture Debt Fund III after a full drawdown. A growing market and increased awareness of venture debt are some of the tailwinds that helped Trifecta Capital achieve this incredible milestone. “We had extensive discussions with the Trifecta Capital team to fine-tune an efficient solution for financing working capital and capex, an essential use case for a commerce business like ours. The added value from Trifecta Capital’s networks and business partners has been phenomenal in our journey,” said Aadit Palicha, Co-Founder and CEO, Zepto.
Interestingly, Trifecta Capital's venture debt funds boast credit quality significantly above the benchmark. Total write-off of investments across the Funds has been less than 0.6%. This is despite disruptions caused by covid, demonetisation, GST rollout as well as the funding winters of 2016 and 2022-2024. Furthermore, given the upside participation by way of equity instruments in the three venture debt funds, the aggregate capital gains are over INR 700 crores which will result in a significant positive impact on fund returns and ensure that there is no net capital loss to any investor. The firm attributes this success to its rigorous selection of businesses with strong moats, favourable demand-supply dynamics, robust unit economics, high-pedigree founders, and strong investor backing.
As Trifecta Capital celebrates its tenth anniversary in 2025, the firm is already looking ahead. With venture debt as a well-established strategy, the Firm has expanded into the growth equity asset class with Trifecta Leaders Fund I, which closed in 2023 with a corpus of INR 1,560 Crores. Led by Lavanya Ashok, formerly Managing Director at Goldman Sachs Principal Investments, Trifecta Leaders Fund I has invested in companies like Atomberg, Meesho, Country Delight, Fibe (formerly EarlySalary), Auxilo, Livspace, and ixigo - with ixigo being the first investee company in its roster to go public with a stellar IPO performance.
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