India’s climate-focused venture capital firm Avaana Capital on Wednesday said it has closed its Climate and Sustainability Fund at $135 million, larger than its target of $120 million.
Led by Anjali Bansal and Swapna Gupta, Avaana invests in thematic areas such as energy and resource management, mobility and supply chains, and sustainable agriculture and food systems.
The firm has backed 20 startups since 2018 like FarMart, Ninety One Cycles, Kazam, Eeki Foods, Aerem, Sentra, Eggoz, TurnO, and Terra.do.
The final close comes months after DealStreetAsia reported that the firm expected to hit the final close within three to six months.
The Avaana Climate and Sustainability Fund, which reached its first close at $70 million in June last year, saw an investment of $24.5 million by the Green Climate Fund (GCF) in March, making its first direct investment in India.
Other investors in the fund include the US International Development Finance Corporation (DFC), the UK government through UK- India Development Cooperation Fund (UKIDCF), the Self Reliant India (SRI) Fund, Small Industries Development Bank of India (SIDBI), Azim Premji Trust, and several large corporations.
Avaana closed its first fund in 2020 and has made nine investments from the vehicle. The firm declined to disclose the size of the fund.
With India targeting net-zero emissions by 2070, investors are increasingly tapping opportunities in the climatetech sector and are preparing substantial capital pools for green energy initiatives.
Apart from Avaana Capital, active investors in India’s climatetech space include Blue Ashva, Speciale Invest, Omnivore, Climate Seeds Fund, Asha Ventures, Transition VC, Climate Angels, EverSource Capital and Avaana Capital. On the LP side, British International Investment is also actively scouting for climate finance opportunities in the country.
The capital that limited partners (LPs) have committed to climate-focused fund managers over the past two years has witnessed a sudden spike, compared to the previous years, show data available with research firm Venture Intelligence.
As many as 13 climate-focused funds raised $719 million in 2023, while another six funds raised a record $989 million in 2022. In the previous year, when awareness was relatively lower, only two climate funds garnered commitments, cumulatively worth $90 million; while in 2020, one climatetech fund raised a meagre $31 million.