Alteria Capital looking to raise up to Rs 1,750 crore in second fund

Three years after it launched its first fund, venture debt fund Alteria Capital is in the process of raising its second fund. It is looking to raise Rs 1,000 crore with a green shoe option of another Rs 750 crore from domestic and global investors.

“Most of our existing investors have shown interest in the second fund. We will also get some new investors on board,” Vinod Murali, managing partner and cofounder of Alteria Capital, told ET.

Investors such as Azim Premji Foundation, Sidbi, Binny Bansal and IndusInd Bank had backed Alteria’s first fund.


Venture funds are playing a key role in the post-Covid world where capital, especially debt, is hard to come by.

“There is a growing appreciation for the venture debt asset class among Indian LPs who have seen strong performance despite Covid-19,” Murali said. “This is a dislocated asset class with low correlation to listed stocks or bonds and hence provides a good hedge as part of their asset allocation.”

Founded in 2017 by Ajay Hattangdi and Murali, Alteria Capital is currently investing from its Fund I which had a corpus of Rs 962 crore. Its portfolio of companies include Rebel Foods, Lendingkart, Zestmoney, Dunzo, Portea, Toppr, Spinny, and Stanza.

The fund has so far backed around 28 companies. Its sweet spot is up to Rs 150 crore.

Alteria backs only VC-funded startups. “There will also be an allocation for structured debt products aimed at later stage companies which have a differentiated risk profile,” Murali said.

The fund recently expanded its partnership team by adding Ankit Agarwal and Punit Shah.

“Venture Debt has evolved over the years with founders and investors having an increasing appreciation for the role played by this asset class through a company’s lifecycle,” said Shah, partner at Alteria Capital. “In the next few years, venture debt in India will gradually catch up to global benchmarks and capture a larger pie of all early stage capital.”

With its ability to recycle capital, Alteria will effectively have more than Rs 4,000 crore available for funding startups across venture debt and structured solutions. “The new fund has obtained approvals from (stock market regulator) Sebi and is expected to have a first close in H1 2021,” Murali said.