Avendus, the highest funding financial institution for enterprise offers in India, confirmed on Wednesday it’s seeking to elevate as much as $350 million for its new personal fairness fund.
The brand new fund, known as Future Leaders Fund III, will allow the Mumbai-headquartered agency to jot down bigger checks and preserve a significant place within the startups it backs, mentioned its managing accomplice 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.
Avendus has established itself as the most important enterprise advisor for startups in India, a daily fixture in most growth-stage offers within the nation. It supplied companies in over 30 offers final yr, together with merger and acquisition transactions, in keeping with Enterprise Intelligence, a non-public market perception platform. The rising measurement of its personal fairness unit underscores the agency’s ambitions to get its tentacles entrenched much more deeply into the ecosystem and have extra upsides on the winnings.
The agency’s rise to prominence was aided by the truth that a lot of its well-established international rivals, similar 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.
That relationship can also be serving to the agency’s personal fairness unit to realize entry to among the high-profile offers. Monetary companies startups Juspay and Zeta have largely allowed solely Avendus outdoors of lead backer SoftBank on their cap tables, for example. “These are companies that got here out of {our relationships} and networks,” mentioned Chandra.
Avendus’ personal fairness unit, whose portfolio consists of Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees, and the Nationwide Inventory Change, has additionally earned a fame for delivering giant exits to its backers well timed. LensKart and the Nationwide Inventory Change, for example, each delivered 4 occasions the cash Avendus invested in inside 4 years of investments.
“Our fund’s lifecycle is 5 to 6 years. An issue with the Indian startup ecosystem is that buyers have poured loads of capital however don’t see a lot returns for a protracted time period. We’re targeted on how can we get our a reimbursement,” he mentioned.
Regardless of the rising pattern 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. In response to Chandra, Avendus has established relationships that allow the corporate to exit its positions by promoting stakes to late-stage buyers, similar to sovereign buyers, offering an alternate avenue for producing returns other than IPOs.
