Avendus, India’s main funding financial institution for enterprise capital offers, confirmed on Wednesday that it’s seeking to increase as much as $350 million for its new non-public fairness fund.
The brand new fund, known as Future Leaders Fund III, will enable the Mumbai-headquartered agency to write down larger checks and preserve a major place within the startups it backs, its managing accomplice Ritesh Chandra instructed TechCrunch. TechCrunch reported in early April that Avendus drawing up a plan to boost a brand new fund.
Avendus has established itself as the most important enterprise advisor to startups in India and is repeatedly concerned in many of the progress stage offers within the nation. The corporate offered companies on greater than 30 offers final yr, together with mergers and acquisitions, based on Enterprise Intelligence, a personal market intelligence platform. The rising measurement of the non-public fairness arm underscores the corporate’s want to sink its tentacles even deeper into the ecosystem and reap extra advantages from its winnings.
The corporate’s rise to prominence was helped by the truth that a lot of its well-established international opponents, resembling Goldman Sachs, Morgan Stanley and JP Morgan, initially had much less give attention to the Indian market, which allowed Avendus to realize a foothold and construct relationships. with the nation’s rising expertise entrepreneurs.
These relationships additionally assist the corporate’s non-public fairness division acquire entry to some high-profile offers. For instance, monetary companies startups Juspay and Zeta have largely included solely Avendus of their cap tables, except SoftBank, the lead backer. “It is a enterprise that got here out of {our relationships} and networks,” Chandra mentioned.
Avendus’ non-public fairness arm, whose portfolio consists of Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees and the Nationwide Inventory Alternate, has additionally earned a repute for delivering giant payouts to its backers on time. LensKart and the Nationwide Inventory Alternate, for instance, introduced in 4 instances more cash than Avendus invested in 4 years of funding.
“The life cycle of our fund is 5 to 6 years. The issue with the Indian startup ecosystem is that traders have invested lots of capital however are usually not seeing a lot return for a protracted time period. We’re centered on how you can get our a reimbursement,” he mentioned.
Regardless of the rising development of tech startups going public in India (a phenomenon that was unusual simply 4 years in the past), traders can’t rely solely on IPOs to generate income. Chandra mentioned Avendus has established relationships that enable the corporate to exit its place by promoting stakes to late-stage traders resembling sovereign traders, offering another path to revenue past an IPO.