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 non-public fairness fund.
The brand 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, mentioned 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.
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 offered companies in over 30 offers final 12 months, together with merger and acquisition transactions, based on Enterprise Intelligence, a personal market perception platform. The rising dimension of its non-public 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 lots of its well-established world rivals, resembling Goldman Sachs, Morgan Stanley, and JP Morgan, initially paid much less consideration to the Indian market, permitting Avendus to achieve a foothold and construct relationships with the nation’s burgeoning tech entrepreneurs.
That relationship can be serving to the agency’s non-public fairness unit to achieve entry to a few of the high-profile offers. Monetary companies startups Juspay and Zeta have largely allowed solely Avendus exterior of lead backer SoftBank on their cap tables, as an example. “These are companies that got here out of {our relationships} and networks,” mentioned Chandra.
Avendus’ non-public fairness unit, whose portfolio contains Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees, and the Nationwide Inventory Alternate, has additionally earned a repute for delivering giant exits to its backers well timed. LensKart and the Nationwide Inventory Alternate, as an 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 traders have poured loads of capital however don’t see a lot returns for an extended time period. We’re targeted on how can we get our a refund,” he mentioned.
Regardless of the rising development of tech startups in India going public, a phenomenon that was unusual simply 4 years in the past, traders can’t solely depend on IPOs for returns. In accordance with Chandra, Avendus has established relationships that allow the corporate to exit its positions by promoting stakes to late-stage traders, resembling sovereign traders, offering an alternate avenue for producing returns other than IPOs.