The leading venture capital bank in India, Avendus, said on Wednesday that it is seeking to raise up to $350 million for a new private equity fund.
The Mumbai-based company will be able to write bigger checks and keep a significant stake in the firms it backs thanks to the new fund, named Future Leaders Fund III, according to managing partner Ritesh Chandra in an interview. Early in April, Eltrys revealed that Avendus was organising a strategy to seek fresh capital.
Avendus and competitors
Avendus, the leading venture adviser for companies in India, has a consistent presence in the majority of growth-stage transactions. A platform that provides insights into the private market, Venture Intelligence, claims that it participated in more than 30 transactions last year, including merger and acquisition transactions. The expanding size of its private equity subsidiary demonstrates the company’s aspirations to expand its reach across the ecosystem and increase its profits. 
Many of its well-known international competitors, including Goldman Sachs, Morgan Stanley, and JP Morgan, initially gave the Indian market less attention, which helped Avendus establish a presence and forge connections with the nation’s budding tech entrepreneurs. This contributed to the company’s rise to prominence.
These connections are also making it easier for the company’s private equity division to get into some of the more well-known transactions. For example, the financial services firms Juspay and Zeta have only permitted Avendus on their cap tables, apart from primary investor SoftBank. According to Chandra, “these are companies that grew out of our networks and relationships.”
Delhivery, Lenskart, Licious, VerSe Innovation, Xpressbees, and the National Stock Exchange are just a few of the companies in Avendus’ portfolio. The private equity division of the company is renowned for providing substantial exits to its investors on schedule. For example, after four years of investing, LensKart and the National Stock Exchange both provided four times the money Avendus invested.
“The lifecycle of our fund is five to six years.” The fact that investors have put a lot of money into Indian startups but don’t see returns right away is one issue with the ecosystem. Our main concern is figuring out how to get our money back, Chandra said.
Investors cannot depend entirely on initial public offerings (IPOs) to generate profits, even with the rising trend of tech entrepreneurs in India going public—a development that was unusual just four years ago. As an alternative to initial public offerings (IPOs), Chandra claims that Avendus has cultivated ties that allow the business to sell holdings to late-stage investors, including sovereign investors, and thus exit its positions.
