India’s climate-focused venture capital firm Avaana Capital on Wednesday said it has secured $70 million in commitments for the first close of its Climate and Sustainability Fund.
The fund is targeting a total corpus of $100-125 million and will focus on three sectors: energy transition & resource management; mobility & supply chains; and sustainable agriculture & food systems.
The Mumbai-based firm said the fund has received strong interest from global and domestic limited partners (LPs) and attracted institutional investors, including Small Industries Development Bank of India (SIDBI), Self Reliant India (SRI) Fund, and the UK India Development Cooperation Fund (UKIDCF); and corporates such as Godrej Group, Murugappa, Torrent, Tsadik, and Bellerive Capital, among others.
Led by Anjali Bansal, Swapna Gupta, and Shruti Srivastava, Avaana Capital has made portfolio investments such as Eeki Foods, Aerem, Kazam, sentra.world, FarMart, Eggoz, Ninety One 91, Turno and Terra.do.
“With significant global capital flowing, supportive policies, corporate interest, and wealth of entrepreneurial talent in the climate sector, India’s climate-tech story is rapidly progressing. At Avaana Climate and Sustainability Fund, we evaluate over 200 new climate opportunities every quarter,” said Anjali Bansal, founding partner, Avaana Capital.
Climate-tech investments in India have surged, attracting $1.2 billion from 2016 to 2020, with a focus on renewable energy and electric mobility. To achieve India’s net-zero emissions goal by 2070, about $2.5 trillion in investments are needed by 2030, according to India’s central bank.
Earlier this month, World Bank Group member International Finance Corporation (IFC) said it was considering an equity investment of up to $30 million in the latest climate-focused private equity vehicle of India-focused Global Environment Fund (GEF) Capital Partners. Separately, Asian Infrastructure Investment Bank (AIIB), a China-backed multilateral development bank, agreed to invest up to $25 million in Lok Capital IV LLC (the Fund), in its first purely impact-focused investment in India.
Temasek-backed investment management firm LeapFrog Investments is raising $600-700 million for its new fund focusing on climate companies, sources told DealStreetAsia. Within Asia, LeapFrog’s key markets are India, Indonesia, and Vietnam.