Trifecta Capital, which recently ventured into equity funding, is expecting to draw $100 million as the first close of its $200 million late-stage fund in the next couple of weeks from domestic investors.
"This is a $200 million fund of which $100 million is for domestic investors and we should be achieving the first close in the next couple of weeks and start writing checks by the end of July or August," Nilesh Kothari, co-founder and managing partner of Trifecta Capital told Moneycontrol in an interaction.
"For the balance $100 million also we are seeing significant interest from offshore investors in the fund," he added.
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 Rs 1,000 crore second fund. It has invested across 77 unique startups including names like BharatPe, Bigbasket, Vedantu, Rivigo, CarDekho, Cure.Fit, Urban Ladder and PharmEasy.
The company is trying to fill in a visible gap in the investment ecosystem in India. That is a late-stage investment with a smaller ticket size.
A lot of 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 which 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.
"If we are coming into a company with a one percent stake, we will likely have information rights, minority protection rights and in some cases tag along rights. Where we have in excess of 5 percent we could even have a board seat," Lavanya Ashok, partner at Trifecta Capital, told Moneycontrol.
The fund has kept its options open for series D onwards all the way up to an IPO stage.
"We will give our investors diversification from companies who are maybe three years from an IPO, all the way to companies maybe six months to one year time frame to an IPO but we are not a Pre-IPO fund," said Ashok.
The fund is currently evaluating seven opportunities. However, it didn't divulge any information given that the talks have not finalised.
Trifecta plans to focus on vertical e-commerce including automotive, grocery, health and beauty categories on the consumer side. While on the B2B side, it will look at sectors such as industrial goods and real estate, among others.
The startup ecosystem is suddenly seeing a boom in potential IPOs with companies like Zomato and Paytm inching ahead for the same. Others in the line include tech firms such as Delhivery, Flipkart, Byju's that have either announced their interests or are evaluating the market.
Trifecta is also planning to set up a third debt fund with a corpus of Rs 1,500 crore. It will venture out in the market for the same by the next quarter.
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