1 With an initial focus on sectors like financial inclusion, healthcare, and sustainable mobility, Trifecta Capital has emerged as a pioneer in venture debt and growth equity in India.

a) What was the original philosophy behind your focus on these impact sectors, and how has it evolved over the years?

Trifecta Capital began as a venture debt fund in 2015, and we recognized the Indian start-up ecosystem was poised for significant growth, including in the sectors you’ve mentioned. Early successes like Flipkart, MuSigma, BigBasket, and InMobi had showcased the potential of Indian tech companies. Trifecta identified early the need for founder-friendly, non-dilutive capital, with an asset class that offered a low-risk profile, predictable returns, and upside participation for domestic and foreign LPs. All these factors contributed to the creation of Trifecta Capital.

As the ecosystem has matured over the last decade, impact themes like education, agri-tech, and fintech have grown. Sustainability & Climate are key impact sectors today. Venture debt is even more important for sustainability & climate companies that take longer to scale, can be physically harder to execute, and typically deliver a commodity-priced output, like energy. Trifecta Venture Debt lengthens the runway-to-success and provides financing that allows scaling up Impact winners, from India to the global mass market.



Trifecta’s portfolio serves Bharat, the heart of India. Trifecta portfolio companies deliver accessible and affordable products and services to over 25 countries, in addition to India. At the same time, Trifecta is an index to India’s new economy, reflected in our diverse portfolio of nearly 200 companies.

b) Impact investing often requires balancing financial returns with measurable social and environmental outcomes. What is Trifecta’s vision for ensuring this alignment over the next decade, especially with rising interest from global investors in India’s impact sectors?

Trifecta is already one of the largest impact investors in India, and globally. Our investments in sustainability and climate span EVs (Turno, Euler, BluSmart), batteries (BatterySmart, Log9), renewable energy (Hygenco, green hydrogen), appliances (Atomberg) and AgTech (DeHaat and several others). Private credit plays an outsized role in sustainability and climate, with the winners in the space having as much as 75% of their capital stack comprising various types of non-dilutive capital. Trifecta Venture Debt is typically the tip of that spear.

Trifecta's portfolio includes many other leaders in other impact sectors, such as Kaleidofin, a fintech company focused on financial inclusion. With 1B+ people, the India growth story is inherently an impact story. And that which works in India typically ripples out to the 5B+ global mass market.

Given the sheer scales of opportunity and capital, Trifecta’s impact goals align with our financial returns*:

• Total capital invested: Rs 6,500Cr ($750M+) / 169 companies
• Total Impact Investments: Rs 3,400 ($450M+) / 86 companies
• Leading sustainability/climate companies that have already abated over 10MMT of CO2e.

*As of Fall, 2024

2 Trifecta was one of the early investors in BluSmart, which has today positioned itself as a pioneer in the EV ride-hailing segment.

a) From an investor’s perspective, what unique factors—such as its asset-light model or focus on sustainability—convinced Trifecta Capital of its leadership potential in this emerging market?

• BluSmart’s operating model sets it apart from competitors. Its no-cancellation, no-surge-pricing model, along with clean and well-maintained cabs, has resulted in higher customer trust and loyalty. Positive customer feedback, including high ratings on platforms like Google Playstore, underscores its strong market appeal. BluSmart’s commitment to building a zero-emission fleet aligns with Trifecta’s objective of supporting strong businesses delivering customer delight in a sustainable manner.
• BluSmart’s innovative fleet-leasing model is capital-efficient and has delivered scale while maintaining operational control. Operating a full-stack ride-sharing platform requires substantial investment, and the founders’ ability to secure funding and structure favorable leasing arrangements early has enabled BluSmart to scale rapidly.
• With its early-mover advantage in the EV ride-hailing space, BluSmart is an established market leader. By prioritizing superior service and commitment to sustainability, BluSmart has developed a loyal customer base to become a major player in the ride-sharing market.

b) How does Trifecta evaluate the broader ecosystem impact of such investments, particularly in catalyzing infrastructure development and consumer acceptance of EV’s?

India is on the move, and infrastructure developments are a core national priority. Private capital providers, like Trifecta Capital, now plays a key role in this ambitious effort. Trifecta investments in electric vehicle charging networks, renewable energy, and innovative batteries further catalyze sustainable infrastructure development.

Trifecta engages with government bodies, policymakers, and other stakeholders to ensure our investments are aligned with national policies and international goals. Indeed, Trifecta’s NCR office is its largest by headcount, reflecting an investment to engage with stakeholders across the spectrum.

c) BluSmart operates in a capital-intensive sector requiring significant investment in EV fleets and charging infrastructure. How did Trifecta balance its approach between growth equity and venture debt in BluSmart? What factors determined which financial product was more suitable at different stages of its journey?

Trifecta invested in BluSmart through its Venture Debt fund, and based on key factors such as predictable cash flows from the existing fleet, the value of its charging infrastructure, and superior unit economics. The investment structure was carefully tailored, with the duration of instruments aligned with BluSmart’s cash flow cycles. Equity “kickers” allow us to be aligned with all stakeholders to ensure the company's success.

Climate is complex, with hard technology at the core of winning solutions. Enterprises are supported not only by equity and impact investors but also by concessional finance facilities, outright grants, and government subsidies. Venture debt plays a role because climate businesses can have more latency and slower growth rates – this is innovation of molecules and atoms, in addition to bits and bytes. In such situations, venture debt can be a difference-maker between success and failure.

d) Beyond providing capital, does Trifecta support BluSmart and other leading investees in areas like governance, strategic partnerships, and impact measurement? Are there specific initiatives or frameworks you use to ensure long-term success?

Absolutely!

Trifecta actively supports its portfolio companies in building strategic partnerships, particularly for B2B-focused businesses. This includes facilitating connections to potential customers, such as other portfolio companies, large Indian family-owned businesses (whose family offices are typically LP’s in Trifecta funds) as well as with other firms within Trifecta's network, to help drive growth.

The firm also introduces portfolio companies to follow-on capital providers. On the equity side, Trifecta guides companies to the most relevant investors to increase the likelihood of successful fundraising. On the debt side, it facilitates connections with banks to help companies strengthen their balance sheets.

To support operational growth, Trifecta provides insights into key performance indicators (KPI’s), benchmarking the company’s standing against peers in its sector and tracking historical growth trends. Trifecta also helps in talent acquisition, having successfully helped many portfolio companies hire finance teams, including CXOs.

3 Many impact sectors benefit from a mix of funding sources. Have you explored incorporating blended finance mechanisms, such as philanthropic capital or government guarantees, in structuring venture debt for your portfolio companies?

As shared by Trifecta Capital’s Rahul Khanna and Jasjit Mangat at the recent Prabhav 2024 in New Delhi, blended finance mechanisms, such as philanthropic capital and government guarantees, are powerful tools for delivering both social and financial returns in impact sectors. These mechanisms encourage mitigating risks, boost investor confidence, and unlock much-needed investment into critical areas.

Trifecta has several portfolio companies that started through blended finance. Trifecta's venture debt took successful models, and accelerated their ‘copy-and-paste’ for greater scale and depth of impact.

4 Trifecta has recently launched its largest fund—Trifecta Venture Debt Fund IV, with a target corpus of Rs 2000 crores. Does the fund have a sectoral focus, or is it sector-agnostic? What innovations in the venture debt space—such as tech-driven underwriting or ESG-linked financing—do you see shaping its future?

Much like our previous venture debt funds, TVDF-IV is sector-agnostic. However, our experience deploying capital in earlier funds has shown that certain sectors and themes, such as Fintech & Financial Inclusion, Agriculture, Mobility and Logistics, and Consumer Goods and Services, will dominate. Additionally, capital-intensive sunrise sectors like climate and sustainability will play a major role this decade. These sectors are important globally, and Trifecta Capital is playing its part.

Leveraging the data from an extensive portfolio of nearly 200 companies, we have developed a proprietary grading system to benchmark the companies we invest in. This system incorporates tech-driven solutions, which inform our investment decision-making and benchmarking processes as we continue to scale.

5 Trifecta Capital’s ability to maintain exceptional credit quality—with write-offs below 0.6% despite macroeconomic disruptions—is remarkable. You attribute this success to rigorous selection criteria and upside participation through equity instruments. How do you balance the rigorous vetting of these start-ups with the flexibility required in the venture debt space, particularly when it comes to navigating market challenges like funding winters or regulatory shifts?

The ability to navigate market challenges has been a hallmark of Trifecta Capital’s journey. We raised our first fund when India’s venture ecosystem was nascent, and venture debt was largely unknown. Over the past decade, we’ve not only built a firm but also helped establish an entire asset class in India. The journey has just begun.

We have a skilled and experienced team that is supported by a rigorous proprietary grading system that ensures disciplined evaluation of start-ups based on business fundamentals, management quality, and growth potential. At the same time, we understand that building an impact company in India for the global mass market is rarely a J-curve. Our team’s experience, skill, and network of ecosystem relations help support founders and management teams through challenging periods.

Our senior leadership team excels at evaluating businesses, founders, and teams. Over the last decade, we have successfully navigated funding winters, demonetization, the GST rollout, COVID, and other regulatory challenges, building the resilience to grow even in uncertain times. This gives the Trifecta team a rich set of experiences, skills and relationships to call upon, as required.

6 'India Venture Debt Report' by Stride Ventures illuminates the story of venture debt transcending the $1.2 billion mark in 2024, underscoring its vital role and evolution in the burgeoning start-up ecosystem. As Trifecta Capital approaches its tenth anniversary in 2025, how do you envision the evolution of venture debt as an asset class in India, and what role will Trifecta play in shaping its trajectory?

Venture debt as an asset class has surpassed the $1B per annum mark in recent years. While it constitutes nearly 20% of venture capital deployed in the US, it accounts for less than 5% in India, underscoring its untapped growth potential.



Over the past decade, Trifecta Capital has focused on building an all-new asset class in India, with a world-class capital investment platform that has the advantage of both scale and scope. This decade will scale venture debt to its full potential, leveraging its non-dilutive and founder-friendly nature to benefit impact enterprises.

As India’s leading venture debt fund, we take pride in evangelizing the asset class and its advantages. Venture debt has already proven effective in impact-heavy sectors. Currently, FinTech is the largest deployer of venture debt, and adoption is expanding across other impact sectors, especially climate.

Trifecta Capital looks forward to playing its role in realizing national and global impact and climate goals and wishes IIC and its members the very best in achieving their own impact goals.