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India’s venture debt firm Trifecta Capital announces first close of Rs 2,000 crore Fund IV

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Sumit Vishwakarma
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Trifecta Capital

Rahul Khanna and Nilesh Kothari, Cofounders of Trifecta Capital

Gurugram-based venture debt firm Trifecta Capital has announced the first close of its fourth and largest fund, targeting a total corpus of Rs 2,000 crore. 

This amount includes a greenshoe option of Rs 500 crore and comes as Trifecta builds on its track record of providing non-dilutive financing to early- and growth-stage startups across the country.

Largest venture debt fund to date

The latest fund, called Trifecta Venture Debt Fund IV, aims to invest in more than 100 companies. Trifecta Capital, which introduced its first venture debt fund in 2015, has steadily expanded this asset class by offering financing solutions to new-economy businesses that often struggle to raise credit from traditional lenders.

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Having fully drawn down its third fund, Trifecta now plans to channel new investments into sectors such as fintech, electric vehicles, consumer products and services, logistics, new-age manufacturing, B2B services, and technology, including software and hardware.

Rahul Khanna, Managing Partner at Trifecta Capital, said, "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."

Focus on emerging opportunities

The firm is also looking at emerging fields like renewable energy, climate and sustainability, which have begun drawing significant interest from mainstream investors.

The firm has already backed companies such as Hygenco, Euler and BatterySmart in these segments and expects to expand further in areas that promise high growth in the next decade. 

According to the firm, this strategy is supported by a growing investor appetite for venture debt, driven by the need for faster innovation and more flexible funding in India’s startup ecosystem.

Proven track record and portfolio

Trifecta has raised a total of Rs 5,300 crore across four venture debt funds and one growth equity fund, deploying Rs 7,800 crore (including recycled capital) in more than 200 businesses.

Its portfolio includes over 30 unicorns, such as Meesho, Zepto and Urban Company, and has a combined valuation of around $67 billion.

The firm reports total credit costs of less than 0.8% across its venture debt funds and says it has generated more than Rs 700 crore in capital gains from equity options, indicating the potential upside for its investors.

"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," added Nilesh Kothari, Managing Partner, Trifecta Capital.

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