Avaana Capital secures $70 million in first close for climate fund

The Mumbai-based firm is targeting a total corpus of $100-125 million for the fund, which will focus its investments in three sectors that it said are responsible for 90% of India’s emissions: energy transition and resource management, mobility and supply chains, and sustainable agriculture and food systems.

The fund has attracted institutional investors, including Small Industries Development Bank of India (SIDBI), Self Reliant India (SRI) Fund, the UK India Development Cooperation Fund (UKIDCF), and corporates such as Godrej Group, Murugappa, Torrent, Tsadik, and Bellerive Capital, among others.

Led by Anjali Bansal, Swapna Gupta, and Shruti Srivastava, Avaana Climate and Sustainability Fund will also invest in tech-driven and innovative climate solutions.

Avaana Capital’s notable portfolio investments include Eeki Foods, Aerem, Kazam, sentra.world, FarMart, Eggoz, Ninety One 91, Turno and Terra.do. Capital from the new climate fund has been deployed into five startups already, with one deal yet to be disclosed, Anjali Bansal, founding partner, Avaana Capital, told ET.

“At Avaana Capital, we recognise that India is integral to global climate solutions and invest in climate solutions for India and the world. Our technology and innovation-first approach, deep sector expertise, and strong relationships across the ecosystem help us build large-scale outcomes in climate and sustainability,” she said.

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Avaana Climate and Sustainability Fund currently evaluates over 200 new climate opportunities every quarter, Swapna Gupta, partner, Avaana Capital, added.“The UK is proud to support development partnerships and investments that are helping to address some of the biggest global challenges. I am pleased our new investment in the Avaana Fund will support innovative businesses develop solutions to climate change and inclusion,” Christina Scott, Acting British High Commissioner to India, said in the statement.

Climate-tech investments in India have surged, attracting $1.2 billion from 2016 to 2020, with a focus on renewable energy and electric mobility. To achieve India’s net-zero emissions goal by 2070, about $2.5 trillion in investments is needed by 2030, the statement added.