Venture debt platform Alteria Capital has revealed that the International Finance Corporation (IFC) will serve as the anchor investor for its Shorter Duration Scheme (SDS), marking IFC’s inaugural investment in the global SME credit sector.
Launched in March of the previous year as part of Fund III, SDS is designed to address the short-term capital needs of startups (with debt tenures under 18 months) across sectors such as fintech, consumer goods, and electric vehicles (EVs), among others.Alteria has already invested in companies like Ivy Homes, Swara Fincare, Moneyview, and TEN x YOU. The firm plans to execute up to 50 investments through SDS over the next 2.5 years.
“We are having ongoing conversations with some foreign and domestic investors, and it is expected to take a few more months to close. We will raise some more capital and are flexible on the sizing of the fund,” Vinod Murali, Managing Partner, Alteria Capital, said.
Although Murali did not reveal the specific target corpus for SDS, the firm aimed to raise $250-$300 million through its third fund. Of this amount, the Venture Debt Scheme was closed at approximately $186 million, with the balance coming from SDS.
“In SDS, we have a commitment period of two and a half years, and we expect to fully return capital in about 12 months after that. It is a shorter-duration product where we return capital, with robust fixed income returns, in under four years. In a venture debt product, this would take five to seven years, but the returns have a higher component of equity upside,” Murali explained.
Alteria will allocate around 60 per cent of the fund to non-banking financial companies (NBFCs) and direct the remaining 40 per cent towards consumer businesses.
“For six decades, IFC has been at the forefront of impact investing in emerging markets. Innovative financial solutions are crucial for bridging funding gaps,” said Wendy Werner, Country Head for India and Maldives, IFC.
“By addressing short-term financing needs and signalling market confidence, we aim to help support India’s startup and disruptive technology ecosystem and accelerate economic growth,” she added.
Alteria Capital has invested over $800 million in debt funding to Indian startups, becoming the fastest firm in Asia to surpass $750 million. Its portfolio includes major startups like Spinny, Ola Electric, One Card, Rebel Foods, and Ather.
The firm’s onboarding of IFC as an anchor investor comes as India-focused VC firms resume fundraising after a year-long pause. Following a dip in VC fundraising in 2024, global and domestic firms, including Accel and Bessemer, are announcing large funds, driven by India’s strong startup IPO pipeline and recovering funding landscape. As more mature startups reach Series A and B, VC fund sizes and investment amounts increase.
