Venture debt firm Alteria Capital has announced the first closing of its Fund III (Option A), India’s largest venture debt fund to date, at Rs 1,000 crore, with the final closure expected to take place in the next two to three years, the indicated quarter. Increased demand for risky debt.

The fund has total funding of Rs 2,000 crore, including a green-shoe option of Rs 1,000 crore, the company said in a statement on October 17. While the company did not mention the details of its limited partners (LPs), it said LPs are a mix of domestic investors and high-net-worth individuals (HNIs).

Murali said the third venture debt fund, Plan A, approved by SEBI in the second quarter of 2022, will continue to support startups that have raised venture capital funding and provide them with a range of specialist debt solutions. He added that Fund III would support around 70-100 startups, including those already covered in the two existing funds.

The fund will remain largely industry-agnostic and target early and growth-stage Indian startups with cheques of up to Rs 150 crore. The company said in the statement that the fund would have a separate program to provide working capital solutions for startups. Alteria Capital consolidated all three funds with assets under management (AUM) of Rs 3,800 crore.

Founded in 2017 by Vinod Murali and Ajay Hattangdi, Alteria Capital has invested in over 100 startups, including Rebel Foods, Spinny, Mensa Brands, DealShare, Good Glamm Group, and Infra.market, BharatPe, Dunzo, Cars24, Niyo, EarlySalary and Zepto.

In October last year, Alteria Capital announced the final closing of its second venture debt fund at Rs 1,800 crore. The company plans to launch Scenario B, focusing entirely on specific use cases, such as working capital management.