Avendus, the highest funding financial institution for enterprise offers in India, confirmed on Wednesday it’s trying to elevate as much as $350 million for its new personal fairness fund.
The new fund, known as Future Leaders Fund III, will allow the Mumbai-headquartered agency to put in writing bigger checks and preserve a significant place within the startups it backs, stated its managing companion Ritesh Chandra in an interview with TechCrunch. TechCrunch reported in early April that Avendus was placing collectively a plan to boost a brand new fund.
An everyday fixture in most growth-stage offers in India, Avendus has established itself as the biggest enterprise advisor for startups within the nation. It offered companies in over 30 offers final yr, together with merger and acquisition transactions, in keeping with Venture Intelligence, a personal market perception platform. The rising dimension of its personal fairness unit underscores the agency’s ambitions to increase its tentacles much more deeply into the ecosystem and see extra upside from the winnings.
The agency’s rise to prominence was aided by the truth that lots of its well-established international rivals, comparable to Goldman Sachs, Morgan Stanley, and JP Morgan, initially paid much less consideration to the Indian market, permitting Avendus to realize a foothold and construct relationships with the nation’s burgeoning tech entrepreneurs.
Those relationships are additionally serving to the agency’s personal fairness unit to realize entry to a number of the high-profile offers. Aside from lead backer SoftBank, the monetary companies startups Juspay and Zeta have allowed solely Avendus on their cap tables, for example. “These are businesses that came out of our relationships and networks,” stated Chandra.
Avendus’ personal fairness unit, whose portfolio contains Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees, and the National Stock Exchange, has additionally earned a status for delivering massive exits to its backers in a well timed method. LensKart and the National Stock Exchange, for example, each delivered 4 instances the cash Avendus invested inside 4 years of investments.
“Our fund’s lifecycle is five to six years. A problem with the Indian startup ecosystem is that investors have poured a lot of capital [into it] but don’t see returns for a long period of time. We are focused on how do we get our money back,” Chandra stated.
Despite the rising development of tech startups in India going public, a phenomenon that was unusual simply 4 years in the past, buyers can’t solely depend on IPOs for returns. According to Chandra, Avendus has established relationships that allow the corporate to exit its positions by promoting stakes to late-stage buyers, comparable to sovereign buyers, offering another avenue for producing returns other than IPOs.
