Venture debt platform Alteria Capital announces the International Finance Corporation (IFC) as an anchor investor in its Shorter Duration Scheme (SDS), marking IFC's first investment in the small and medium enterprise (SME) credit segment globally.

Initiated in March of the previous year under Fund III, SDS concentrates on providing short-term funding solutions for startups (with debt durations of less than 18 months) across sectors such as fintech, consumer goods, and electric vehicles (EV), among others.

Although the firm has not yet completed the final closing of SDS, it has already allocated funds to companies like Ivy Homes, Swara Fincare, Moneyview, and TEN x YOU through this fund. Alteria intends to execute up to 50 investments in the next 2.5 years through SDS.

"We are having ongoing conversations with some foreign and domestic investors which 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,” says Vinod Murali, Managing Partner, Alteria Capital.

"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," adds Vinod.

Up to 60 percent of the fund will target licensed non-banking financial companies (NBFCs), while the other 40 percent will be allocated to 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," says 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 start-up and disruptive technology ecosystem and accelerate economic growth," Wendy adds.

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The portfolio of the venture debt platform features well-known Indian startups such as Spinny, Ola Electric, One Card, Rebel Foods, Ather, Bluestone, Jupiter, Fibe (Early Salary), Giva, and Sarvagram.

 Following a significant decline in VC fundraising in 2024, a number of global and domestic investment firms, including Accel and Bessemer, have announced substantial funds this year, motivated by India's robust startup IPO pipeline and an improving funding environment.