Mumbai: Venture debt pioneer Trifecta Capital has raised Rs 1,500 crore for its maiden equity fund called Trifecta Leaders Fund-I and is now looking to raise another Rs 375 crore under a green shoe option to capitalize on the strong investor demand for his fund, a senior executive in an interaction.
The fund was launched in May 2021 amid the second wave of the COVID-19 pandemic and first announced its closure in July 2021. The maiden equity fund of Trifecta is focused on investing in late-stage Indian tech startups.
So far, the fund has invested Rs 730 crore in eight late-stage startups such as Dailyhunt, Livspace, Cars24, Pristyn Care, ixigo, Good Glamm Group, API Holdings (Pharmeasy) and Meesho.
"We have built a highly diversified portfolio, and the common trend across all of these companies is that most of these companies are category leaders. They all have strong long-term fundamental growth prospects. They have demonstrated solid unit economics; in many cases are profitable in certain lines of the business and they are incredibly well capitalized Rahul Khanna, Managing Partner of Trifecta Capital said the cash flow on the balance sheets of these companies is now around Rs 17,000 crore which means they can go through a good two years without having to raise capital.”
He added that many of these companies are on a path to reach a liquidity event within the next 12-24 months and two of the companies may go public fairly quickly.
While the fund is investing in swap opportunities as companies prepare to go public, Khanna said it is not a fund focused on an IPO.
“This is not a pre-IPO fund, and I think now the difference will become much clearer between funds that have been trying to balance time and funds like ours that have taken a fundamentally long-term view of a structural gap in the last phase. of the project,” Khanna said.
Trifecta sees a good opportunity for late-stage investments in 2022, especially in light of recent developments, as US tech stocks saw a sharp correction.
"Whatever we see in the markets, what happened in the US and some of that happened in India as well. So 2022 could also be a great year to make new investments, because some of the valuations are corrected in the new offers as well," Khanna said. Companies that need capital will grow and hopefully valuations will be more attractive.
Trifecta expects to publish the fund in full in calendar year 2022.
In addition to local investors, the fund has also seen interest from foreign investors who are interested in tapping into Indian tech companies that are likely to go public. About 15-20% of the common fund is likely to come from foreign investors, Khanna said.
On the domestic side, the fund has received commitments from several insurance companies and asset management companies, as well as large family offices.
“Investors have appreciated our disciplined portfolio construction approach and the eight investments completed to date have underscored the proprietary advantage of Trifecta Capital in sourcing and valuing investments in some of India's most attractive technology companies,” said Lavanya Ashok, a partner at Trifecta Capital.
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