Trifecta Capital launches Venture Debt Fund-IV as its total investment crosses Rs 6,000 crores

BusinessWire India

Gurugram (Haryana) (India), August 2: Trifecta Capital, a pioneer in venture debt funds in India, has launched its largest fund – Trifecta Venture Debt Fund IV, with a target capital of Rs 2000 crores. This milestone comes as Trifecta Capital celebrates crossing Rs 6000 crores in investments in over 180 startups through its three previous venture debt funds since 2015. Over 50 startups have achieved unicorn/soonicorn status and are considered category leaders including Atomberg, BigBasket, BlueStone, Country Delight, Cars24, Cashfree, Curefit, DailyHunt, GlobalBees, Infra.Market, Livspace, Meesho, PaperBoat, UrbanCompany, Zolve and Zepto.

“We have consistently supported the startup ecosystem despite all the challenges the market has faced since 2015. Our focus on great founders, category-leading companies with solid unit economics and strong venture capital backing has helped establish best practices in the industry and enabled strong growth for 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 worth Rs 500 crores

* Trifecta Venture Debt Fund II worth Rs 1024 crores

* Trifecta Venture Debt Fund III worth Rs 1,777 crores

While the Indian venture capital industry is over 20 years old, venture debt, its companion asset class, is just 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 to early-stage and growth 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 profit sharing.

Riding on the success of its three previous venture debt funds, Trifecta Capital recently launched its venture debt fund IV with a target size of Rs 2,000 crores (including a greenshoe of Rs 500 crores) and has been receiving a good response from existing and new investors. The company expects further investments from its LPs despite the volatility in the global startup ecosystem over the past three years. “We are grateful to all our investors for their support over the last nine years and look forward to delivering strong returns. We also want to acknowledge the efforts of our investment teams in Mumbai, Bengaluru and NCR who have focused on delivering best-in-class returns while prioritizing capital preservation, which is a key element of this asset class,” said Nilesh Kothari, Managing Partner, Trifecta Capital.

The investment of Rs 6,000 crores in venture debt represents a significant milestone in the company’s nearly decade-long journey, cementing its reputation as a preferred provider of non-dilutive, founder-friendly capital across the startup lifecycle. This has been further validated by the companies that have been supported during challenging times like Covid and the slowdown in equity funding over the last few years. “During the post-Covid recovery phase, our traffic was growing but was not yet at pre-pandemic levels. The opportunity to expand our train and bus services was key for us, but the equity valuations we were receiving reflected cautious market optimism. Trifecta Capital provided us with the venture debt we needed at a critical juncture, enabling us to pursue an acquisition opportunity and propel our growth forward,” said Aloke Bajpai, Co-Founder and Group CEO, ixigo.

Trifecta Capital has gained support from large family offices, insurance companies, banks, financial institutions, corporate treasuries, mutual funds and development financial institutions.

After completing the investment phase of Trifecta Venture Debt Fund I and Trifecta Venture Debt Fund II, the company has returned a significant portion of its capital and generated consistent returns for nine years. Trifecta Capital is also actively recovering capital from its Venture Debt Fund III after a complete exit. The growing market and increased awareness of venture debt are some of the enabling factors that have 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, which is a necessary use case for a trading business like ours. The value added by Trifecta Capital’s network 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 of credit quality that is well above the benchmark. The total write-down of investments across the funds was less than 0.6 per cent. This is despite disruptions caused by Covid, demonetisation, GST implementation, and the funding winter of 2016 and 2022-24. Moreover, taking into account the equity share of profits across the three venture debt funds, the total capital gains stand at over Rs 700 crores, which will have a significant positive impact on fund returns and ensure that no investor incurs a net capital loss. The firm attributes this success to rigorous selection of businesses with strong moats, favourable supply-demand dynamics, solid unit economics, well-reputed founders and strong investor support.

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 capital asset class with Trifecta Leaders Fund I, which closed in 2023 with a capital of Rs 1,560 crores. Led by Lavanya Ashok, former Managing Director, 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 to go public with a stellar IPO track record.

Additional quotes from the founders

Raghunandan G, Founder, Zolve: “Partnering with Trifecta Capital has transformed our approach to managing our operational expenses. Their tailored financial solutions and strategic insights have been instrumental in driving growth in our business and improving our bottom line.”

Souvik Sengupta, Founder, Infra.Market: “The involvement of Trifecta Capital has been instrumental in accelerating our growth trajectory. Their deep understanding of our industry and commitment to our vision have allowed us to optimize our capital structure and achieve sustainable growth.”

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