Avaana Capital, a climate and sustainability-focused investment firm, has achieved the first close of its second fund which has a target corpus of $150 million, sources in the know of the development told Business Today.
The company has raised approximately $60-70 million as the first close and expects to make a final close within this calendar year.
The company has made four investments from the new fund, aforementioned sources said. Agritech start-up EekiFoods is the only transaction that’s made public from the new fund. Avaana Capital led the $2 million funding in EekiFoods with participation from Better Capital, Icebreaker VC, Spectrum Impact, Kunal Shah (Founder, CRED), Ramakant Sharma (Founder Livspace) and others.
Avaana Climate and Sustainability Fund invests in thematic areas of energy and resource management, mobility and supply chains, and sustainable agriculture and food systems.
Since 2018, Avaana has backed over 20 early-stage start-ups. Its portfolio includes FarMart, Ninety One, Praman (Intello Labs), CoverStack, Eggoz, TurnO, Terra.do, and Praan.
Mumbai-based company recently strengthened its leadership team by roping in Vishnu Rajeev, former mobility and climate tech lead at Axilor Ventures as an Investment Principal and promoting Shruti Srivastava, former Principal to the role of Investment Director.
Climate tech as an attractive asset class for pure-play VC investors, and not as impact funding or ESG investment targets, has just begun to gather steam. According to HolonIQ, climate tech firms raised $70 billion globally in 2022. Enzia Ventures, a mid-market venture capital fund, recently predicted that India is likely to attract climate-tech investments to the tune of $20 billion by 2030.
From renewable energy to sustainable agriculture, Indian start-ups are poised to lead the charge in developing innovative solutions that can help mitigate the effects of climate change and build a more sustainable future.
Critical to our economy and growth, India is spearheading one of the most robust climate actions through Nationally Determined Contributions, which includes an ambitious programme for transitions to clean energy in the world. The Economic Survey 2023, which was tabled in the Parliament, stated that India has enhanced its climate ambition manifold and has embarked on a long-term strategy towards a low GHG emission-based development, despite the adverse impacts of Covid-19 on the economy.
The 2023 Union Budget advocated for 'Green Growth' on the back of India’s net zero targets, which the country seeks to attain by 2070.
“We are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing the carbon intensity of the economy and provide for large-scale green job opportunities,” Finance Minister Nirmala Sitharaman said in her budget speech.
Ranging from the National Green Hydrogen Mission that will facilitate the transition of the economy to low carbon intensity to setting up 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan), many green initiatives were announced in the Budget.