IFC Invests $25m in Trifecta Venture Debt Fund IV to Boost Indian Startups

The International Finance Corporation (IFC), a member of the World Bank Group, has announced an investment of up to USD 25 million in Trifecta Venture Debt Fund IV, the latest venture debt vehicle from Trifecta Capital, India’s leading provider of venture debt. The fund will provide flexible, lower-cost financing solutions to innovative startups, fostering sustainable growth, job creation, and sector-wide innovation in one of the world’s fastest-growing startup ecosystems.

Supporting India’s Expanding Startup Economy

India’s startup landscape has grown at remarkable speed, with over 1.6 million jobs created as of December 2024. However, while equity financing is widely available, startups often struggle to access alternative financing mechanisms that support working capital, asset purchases, and long-term sustainable growth.

Venture debt provides a crucial complement to equity by offering non-dilutive, founder-friendly financing at Series A and later stages. IFC’s investment is expected to help expand venture debt as a nascent asset class in India, attracting more institutional investors and diversifying funding options for startups.

Farid Fezoua, IFC’s Global Director for Disruptive Technologies, Services and Funds, highlighted the strategic importance of this move:

“Providing more funding options to innovative startups, including flexible, cost-effective mechanisms like venture debt, is essential for India’s economic growth and job creation. Our investment in Trifecta Capital is in line with our IFC 2030 strategy to mobilize private capital at scale and drive digital innovation and private sector-led development that delivers more jobs.”

Targeting High-Impact Sectors

Trifecta Venture Debt Fund IV will focus on startups in high-growth, high-impact sectors, including:

• Electric vehicles and clean mobility ecosystems

• Financial services and fintech

• Deep technology areas such as climate-tech, AI infrastructure, agri-tech, and manufacturing-tech

• Consumer, education, and healthcare segments

By prioritizing these industries, the fund aims to back companies that not only create strong financial returns but also address pressing development challenges such as climate change, digital inclusion, and access to quality health and education services.

Rahul Khanna, Managing Partner at Trifecta Capital, welcomed IFC’s backing:

“Our partnership with IFC enhances our ability to back transformative companies with flexible, founder-friendly capital at critical moments in their growth journey. It also reinforces our long-term commitment to climate and sustainability-led innovation—areas where venture debt can serve as a catalytic force in scaling impact.”

IFC’s Broader Strategy in Private Equity and Venture Finance

This investment aligns with IFC’s wider private equity funds strategy, which seeks to channel growth capital into funds with both high financial potential and strong development impact. By supporting Trifecta, IFC is helping to deepen India’s financial ecosystem, promote innovation, and create inclusive economic opportunities for youth and entrepreneurs.

Over the past decades, IFC has played a key role in mobilizing private capital in emerging markets. Its latest investment in India’s venture debt market reflects a broader push to scale digital transformation, drive climate-smart investments, and foster sustainable private sector development.

Driving Growth Through Innovation and Jobs

India’s young workforce and dynamic entrepreneurship landscape represent a major opportunity for economic growth. By strengthening access to diverse forms of capital, initiatives like Trifecta’s Venture Debt Fund IV are expected to accelerate innovation, generate employment, and build resilience across multiple industries.

As venture debt becomes more established in India, IFC’s support will demonstrate how alternative financing models can complement equity and bank lending, ultimately broadening the capital base for new economy businesses.