India’s largest venture debt platform Alteria Capital has announced the final close of its third venture debt fund. The venture debt scheme of Alteria Fund III has been significantly over-subscribed with a final close at ₹1550 crore.

Alteria Capital has adopted a twin scheme strategy as part of its third fund which includes a venture debt scheme and a shorter duration scheme to cater to multivariate capital needs of Indian founders. The third fund is expected to raise $250-300 million in aggregate, across both schemes, where the venture debt scheme has been closed at $195 million. The shorter duration scheme has been opened for subscription with a final close expected by end of 2024.

With an AUM of ₹4350 crore across three funds, Alteria manages the largest pool of capital for venture debt for Indian startups currently. The ability to recycle capital during the commitment period implies aggregate available liquidity of $1 billion+ for Indian startups.

Alteria Capital Fund’s third venture debt scheme had a target size of ₹1000 crore with a green shoe option which has been significantly over-subscribed with more than half the fund contributed by existing investors. This scheme will continue to back start-ups that have already raised VC funding and provide them with a range of specialty debt solutions up to ₹200 crore per company. Alteria has raised almost all its capital from domestic investors.

The fund has already deployed 50 per cent of the total capital commitments demonstrating the heightened demand for structured debt in India currently. Portfolio Companies of this fund include One Card, Renee Cosmetics, Samunnati, Bliss Club, Rebel Foods, Giva, Lead School, Kissht, Captain Fresh, Traya, Bluestone and Ather.

Vinod Murali, Cofounder and Managing Partner, said that the strategy to split their fund into two schemes with different propositions arises from the fact that startups need innovative solutions across different use cases, tenors and price points.

“We wanted to align our investors to these expectations and ensure that the Founder-LP fit is appropriately designed. It has been an extremely challenging environment to raise capital for startups as well as funds and we are humbled by the support shown by our LPs who have supported our plans strongly,” he added.