Avendus, India’s leading enterprise investment bank, confirmed on Wednesday that it goals to raise up to $350 million for its latest private equity fund.
The latest fund, called Future Leaders Fund III, will enable the Mumbai-based company to write larger checks and maintain a significant position in the startups it supports, its managing partner Ritesh Chandra told TechCrunch. In early April, TechCrunch reported that Avendus was developing a plan to raise a latest fund.
Avendus has established itself as the largest enterprise capital advisor to startups in India and frequently participates in most growth stage deals in the country. Last 12 months, he provided services on greater than 30 transactions, including mergers and acquisitions, according to Venture Intelligence, a private market intelligence platform. The growing size of the private equity unit underscores the company’s ambition to dig its tentacles even deeper into the ecosystem and reap more rewards from its winnings.
Contributing to the company’s rise to prominence was the incontrovertible fact that many of its established global rivals, equivalent to Goldman Sachs, Morgan Stanley and JP Morgan, initially paid less attention to the Indian market, which allowed Avendus to gain a foothold and build relationships with emerging technology entrepreneurs in country.
The relationship also helps the company’s private equity unit gain access to some high-profile deals. For example, financial services startups Juspay and Zeta have largely only allowed non-primary sponsor SoftBank Avendus in their cap tables. “These are companies that have emerged as a result of our relationships and networks,” Chandra said.
Private equity unit Avendus, whose portfolio includes Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees and National Stock Exchange, has also built a fame for delivering big exits on time to its backers. For example, LensKart and the National Stock Exchange brought in 4 times the money Avendus invested in inside 4 years of investing.
“The life cycle of our fund is five to six years. The problem with the Indian startup ecosystem is that investors have put in a lot of capital but have not seen much profit for a very long time. We are focused on how to get our a refund,” he said.
Despite the growing trend of tech startups going public in India, which was a rare occurrence just 4 years ago, investors cannot rely on IPOs alone for profits. According to Chandra, Avendus has established relationships that allow the company to exit its position by selling shares to late-stage investors equivalent to state investors, which provides an alternative route to generating profits beyond an IPO.