Avana Capital, the early-stage venture capital firm that runs the Avana Climate Sustainability Fund, expects to have liquidity soon, according to founding partner Anjali Bansal.
Despite being a volatile fund, it has recorded positive performance across its portfolio companies, she said. business line. However, she did not reveal her financial details. Edited excerpts from the interview:
What is the fund’s core investment strategy?
The fund reviews 800 to 1,000 startups each year, looking for new entrants where critical climate issues and major market opportunities align. Additionally, startups are evaluated on four parameters: A differentiated technology or business model innovation. Tackle big problems and markets. Possibility to build a big business. and the right founding team with the expertise.
What are the hot areas in climate change technology?
The company focuses on energy transition (renewable energy, energy storage, green hydrogen), mobility and supply chain (electric mobility, circular economy) and agriculture (climate-resilient agriculture, precision agriculture).
Could you give us an overview of your current portfolio?
We have close to 15 investments, including funds such as Kazam, eekifoods, FarMart, Praan, Aerem, and more. They typically take a significant ownership stake of 8-15% in their portfolio companies. Initial checks, on the other hand, range from $1 million to $3 million, with a portion of that being held in reserve for subsequent rounds for high-performing companies. The fund typically targets five to six new deals per year.
What is the exit strategy of your portfolio company?
Our fund is still young, so we expect liquidity to start appearing soon. In the long term, exit strategies will include a combination of secondary sales, mergers and acquisitions, and, for companies that perform well, IPOs (initial public offerings). IPOs typically occur 7 to 10 years after the initial investment.
What is the status of Avaana Capital’s Fund 2 funding?
We have completed the first close of our second fund and are aiming for a total fund size of ₹100 billion. The fund focuses on mitigation, adaptation and resilience in key areas such as energy transition, mobility and supply chains, and climate-resilient agriculture. Final completion is expected by late 2024.
How do you perceive the current startup funding environment?
The funding environment is slowing down globally, with emphasis on profitability and unit economics. The early stage remains active, but the growth stage is seeing valuation corrections. In climate change technology, mainstream sectors such as renewable energy are attracting capital, but investor education is essential for new areas of innovation.