Climate-focused venture capital firm Avaana Capital has successfully raised $70 million for the first close of its Avaana Climate and Sustainability Fund. The firm aims to reach a total corpus of $100-125 million for the fund.
The fund will primarily focus on investing in three sectors: energy transition and resource management, mobility and supply chains, and sustainable agriculture and food systems.
Prominent institutional investors, including the Small Industries Development Bank of India (SIDBI), Self Reliant India (SRI) Fund, the UK India Development Cooperation Fund (UKIDCF), as well as well-known corporations such as Godrej Group, Murugappa, Torrent, Tsadik, and Bellerive Capital, among others, have shown interest in the fund, according to a statement by Avaana Capital.
Led by Anjali Bansal, Swapna Gupta, and Shruti Srivastava, the Avaana Climate and Sustainability Fund aims to invest in tech-driven and innovative climate solutions, focusing on climate risk mitigation, adaptation, and resilience building.
Anjali Bansal, founding partner of Avaana Capital, highlighted the promising landscape of India’s climate-tech sector, with substantial global capital, supportive policies, corporate interest, and a wealth of entrepreneurial talent. The fund evaluates over 200 new climate opportunities every quarter, she added.
Established in 2018, Avaana Capital supports startups that operate in sustainable supply chains across various industries, clean transport, sustainable input platforms, climate-resilient processes, precision agriculture, circular economy platforms, as well as alternative materials and chemicals. The firm’s portfolio already includes notable startups such as FarMart, Terra.do, Turno, NinetyOne Cycles, and Sentra.World, among others.
As investors increasingly recognize the potential of the climate tech sector, boutique investment advisory firm CaHa Capital recently launched VAIA Climate Studio, a venture studio focused on climate tech and climate finance. The studio aims to build startups from scratch, invest in them, and scale their operations.
According to a report, the climate tech market surpassed $12.5 billion in 2021, and it is projected to grow at a compound annual growth rate (CAGR) of approximately 24% between 2022 and 2028. The sector’s growth reflects the increasing importance placed on sustainable and climate-friendly solutions.
