Homegrown venture capital firm Avaana Capital has hit the first close of its second climatetech fund with commitments of $70 million (Rs 574.4 crore).
With a focus on domestic startups, the VC company’s Avaana Climate and Sustainability Fund will earmark an initial average cheque size of $1-2 million and will reserve around 3 times of it for follow-on investments in portfolio companies, founding partner Anjali Bansal told VCCircle.
The firm said that it has earmarked 60-65% of the fund towards follow-on investments. “It’s a 1/3:2/3rd approach," Bansal added.
The fund has received commitments from the Small Industries Development Bank of India (SIDBI), the Self Reliant India (SRI) Fund, the UK India Development Cooperation Fund, and corporates such as Godrej Group, Murugappa, Torrent, Tsadik, and Bellerive Capital, among others.
"India, with a responsibility to uplift standard of living for 400 million citizens, requires acceleration in the adaptation and adoption of technology for climate action. Avaana is a leader in climatetech and the mission of mitigating climate risk," S Ramann, chairman and managing director of Sidbi said in a statement.
Led by Bansal, Swapna Gupta, and Shruti Srivastava, Avaana Climate and Sustainability Fund is targeting a total corpus of $100-125 million for the fund and will focus its investments in three sectors within the climatetech space; energy transition and resource management; mobility and supply chains and; sustainable agriculture and food systems.
The VC firm expects to complete the final close of the fund in the next 6-12 months, Bansal added.
In terms of the number of investments made, Bansal said that the firm has made four investments from the fund until now and they plan to make up to 25 investments in total from the fund. The four investments from this fund include Eeki Foods, Kazam, Aerem and sentra.world.
"The SRI Fund's objective is to support onward growth capital to support the economy. Our partnership with Avaana for India's first tech-led climate fund is to realise those objectives through climate solutions from India," said Suresh Kohzikote, Self Reliant India Fund.
Earlier this month, Avaana led the $2 million seed funding round of environmental, social, and governance (ESG)-focused SaaS startup sentra.world. The round also saw participation from RPG Ventures and Golden Sparrow Ventures.
Since 2018, the Mumbai-based VC firm has backed over 20 early-stage startups from its first fund, the size of which the firm declined to disclose. Its portfolio includes FarMart, Ninety One, Praman (Intello Labs), CoverStack, Eggoz, TurnO, Terra.do, and Praan.
