Avaana Capital achieves first close for new climatetech fund

Avaana Capital achieves first close for new climatetech fund

Avaana Capital Achieves First Close for New ClimateTech Fund

Avaana Capital, a homegrown venture capital firm, has successfully reached the first milestone of its second climate technology (ClimateTech) fund, securing commitments worth $70 million (₹574.4 crore).

With a strong emphasis on supporting domestic startups, Avaana Capital’s Avaana Climate and Sustainability Fund will initially provide funding in the range of $1-2 million per venture. Additionally, the fund plans to reserve approximately three times that amount for follow-on investments in portfolio companies, according to Anjali Bansal, a founding partner at Avaana Capital, in an interview with VCCircle.

Bansal further explained that around 60-65% of the fund has been allocated for follow-on investments, following a “1/3:2/3rd approach.”

Prominent investors who have committed to the fund include the Small Industries Development Bank of India (SIDBI), the Self Reliant India (SRI) Fund, the UK India Development Cooperation Fund, and corporate entities such as Godrej Group, Murugappa, Torrent, Tsadik, and Bellerive Capital.

In a statement, S Ramann, Chairman and Managing Director of SIDBI, emphasized the importance of technology adoption for climate action, stating, “India, with a responsibility to uplift the 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.”

Under the leadership of Bansal, Swapna Gupta, and Shruti Srivastava, the Avaana Climate and Sustainability Fund aims to secure a total corpus of $100-125 million. The fund will concentrate its investments in three key sectors within the ClimateTech domain: energy transition and resource management, mobility and supply chains, and sustainable agriculture and food systems.

Bansal added that the final close of the fund is expected to be completed within the next 6-12 months.

Regarding investment activity, Bansal revealed that the fund has already made four investments, with a target of up to 25 investments overall. Some notable companies backed by the fund include Eeki Foods, Kazam, Aerem, and Sentra.world.

Suresh Kohzikote, from the Self Reliant India Fund, expressed the fund’s objective to provide growth capital for the economy and their partnership with Avaana for India’s first tech-led climate fund to achieve these goals through climate solutions.

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Recently, Avaana Capital led a $2 million seed funding round for sentra.world, an environmental, social, and governance (ESG)-focused SaaS startup. RPG Ventures and Golden Sparrow Ventures also participated in the funding round.

Since 2018, the Mumbai-based venture capital firm has supported over 20 early-stage startups through its first fund, the exact size of which remains undisclosed. Notable companies in its portfolio include FarMart, Ninety One, Praman (Intello Labs), CoverStack, Eggoz, TurnO, Terra.do, and Praan.

About Avaana Capital:

Avaana Capital, spearheaded by Anjali Bansal, Swapna Gupta, and Shruti Srivastava, is an Indian early-stage investor in climate technology. The firm has made investments in various companies, including Eeki Foods, a sustainable farming startup, Aerem, a solar rooftop financing company, and Kazam, an electric vehicle charging software platform.

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