Software-as-a-service and B2B technology-focused Avataar Venture Partners – the backer of unicorns such as Amagi and Zenoti – has launched its second fund with a target corpus of $350 million (about Rs 2,800 crore), according to an announcement.
Fund II, which has hit the first close with investments from institutional investors from the US, Europe and West Asia, may end up raising $400 million in the final close, per media reports.
“In the current market environment, Avataar is uniquely positioned to invest in growth-stage SaaS and B2B tech companies with $10-30 million ARR (annual recurring revenue),” said Mohan Kumar, managing partner, Avataar.
“Indian SaaS companies are able to build global businesses far more efficiently – they spend less than half the amount of money for every dollar of ARR earned compared to global peers,” Kumar said.
From the second fund, Avataar may be looking to invest in 13 to 15 companies.
Avataar’s investments include software unicorn Amagi, travel and hospitality company RateGain, and SaaS unicorn for the wellness industry Zenoti. The firm is also an early investor in ElasticRun, a unicorn that provides a B2B e-commerce platform to reach rural India.
“Avataar has established its specialist operational VC model of working closely with founders who want to scale from $10 million ARR to over $100 million quicker by leveraging the team’s experience of having seen the scaling journey multiple times over,” said Nishant Rao, founding partner, Avataar.
“Three out of nine Avataar companies are already past $100 million ARR (and) $1 billion GMV, with another three to four on track to hit the milestone in the next couple of years,” Rao added.
“The Indian SaaS market is expected to grow multi-fold to $20-25 billion by 2025 from $4-7 billion in 2020,” according to a study by EY and CII titled “India: The next global SaaS capital”.
Compared to only one SaaS unicorn in 2018, India now has a total of 18, taking the third spot among the largest SaaS ecosystems in the world, per the report.