Trifecta Capital has announced the first close of its late-stage venture capital fund Trifecta Leaders Fund I raising $130 million with participation from domestic investors including large corporates, insurance companies, family offices, ultra-high net individuals and entrepreneurs.
Existing investors of Trifecta Capital’s Venture Debt Funds have also made significant investments in this Fund.
For the balance $70 million, the firm is in discussions with several domestic and global institutional investors.
Moneycontrol had reported on the firm's plans to close $100 million tranche in July, last month.
The fund will invest in late-stage tech startups that are likely to seek liquidity outcomes in the next 1-3 years and has already made commitments to five companies. The plan is to invest $15-30 million each in around 10-12 companies for minority stakes, through a combination of primary and secondary positions.
The fund was launched three months ago and targets a corpus of $200 million.
The fund is filling a structural gap in the late-stage VC ecosystem in India, and in addition to primary infusions, will cater to the unmet needs of late-stage companies by providing off-cycle liquidity to early investors, angels, current and former employees including consolidation of equity cap tables.
A lot of the time entrepreneurs need a small cheque of $20-30 million to just enter a new market or to start a new stream of business. Despite being in a late stage they do not want to raise a big round and dilute a lot of equity.
This is the space that early-stage investors cannot fill in because by that time they usually end up achieving their targeted ownership. They do not necessarily have the ability or the appetite to keep taking exposures.
Large investors on the other hand would often like to write bigger cheques.
That's the space Trifecta is planning to disrupt. It is targeting to fund companies for equities ranging from one to high single-digit percentage.
Trifecta pioneered venture debt in India with the launch of its first Rs 500 crore debt fund. It recently made the final close of its $140 million second fund. It has invested across 75 unique startups including names like BharatPe, Bigbasket, Vedantu, Rivigo, CarDekho, Cure.Fit, Urban Ladder and PharmEasy.
There are over 50 unicorns in India, up from 5 in 2014 and expected to grow to 100 by 2025. Presence of large unicorns and platforms as well as favorable regulatory changes to ease the listing of start-ups in India is expected to result in a large number of IPO and mergers and acquisitions opportunities in the country and aid exits.
The firm also has plans to invest in its portfolio companies of the debt fund where it has proprietary knowledge of the businesses as well as deep relationships with founders and investors.
"We are leveraging our existing relationships as well as strong equity investing and exit experience to extend our financing capabilities to late stage companies. Having already made five investment commitments from the fund, we are solving for diverse capital needs spanning primary capital for growth and off-cycle liquidity to early investors. Our team is equipped with the skills and experience to partner with founders as they embark on the path to finding permanent sources of capital and will fill a structural gap in the late stage VC financing landscape," said Lavanya Ashok, Partner Trifecta Capital.
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