Alteria is one among the upcoming venture debt to be primary in India, which is backed by Binny Bansal and Azim Premji Foundation with two hired partners from rival firm Innoven Capital. The firm was started in 2018 by Vinod Murali and Ajay Hattangdi. Alteria Capital is one among India’s largest providers of loans to startups and it is eyeing a new record fund and searching to going beyond its core product, signaling an appetite for nuanced financial products and maturity within the startup ecosystem.
The market regulator Securities and Exchange Board of India approved Alteria to spice up Rs 1,000 crore, in conjunction with a greenshoe of Rs.750 crore, it said during a press release. Depending on the demand, the greenshoe option allows for boosting extra money than planned. In all, this fund could be nearly double Alteria’s debut fund of Rs 960 crore, which it closed in mid-2019. Venture debt firms generally lend to startups with a payback period of two to four years and a rate of interest of 12-14 percent (although these terms vary case to case) in exchange for a flash equity stake or warrants in fast-growing startups, as against traditional lenders who look for asset-backed guarantees.
Alteria’s 28 portfolio companies include milk brand Country Delight, on-demand delivery firm Dunzo, small-business lender Lendingkart, cloud-kitchen firm Rebel Foods, and Kotex startup Nua Woman. Venture debt firms typically back startups that have already raised some venture capital money and believe future VC rounds and sustained income within the top of the day to urge back their investments. IndusInd Bank, Small Industries Development Bank of India (Sidbi), Azim Premji Foundation and Flipkart co-founder Binny Bansal are the primary investors from its fund. Instead of the quality equity warrants, companies can provide assets or other traditional modes as security, also bringing Alteria’s offering on the brink of normal banks and non-bank lenders (NBFCs).
Alteria has come up with new products to draw in investors (LPs) for its fund- banks and family offices who need a low-risk exposure to mature startups. While lending to those mature startups, Alteria also plans to let its LP’s fund these firms also. This provides the startup more sources of debt and provides institutions access to those proven startups that they otherwise won’t get. Among the new fund given, about 20% are getting to be for this new product, while the remaining goes to be venture debt for early to growth-stage startups. Alteria cuts cheques starting from half 1,000,000 dollars rising to $20 million, relying on the company’s appetite to take in debt.
The adoption of digitalization helping for the speedy recovery of the many startups from covid-19 through its fundraising and hiring. Investors have large concerns about regulatory uncertainty, though the market has grown in a steady manner. Investors want to take a position during a disciplined manner and startups got to have a far better corporate governance.