Avaana Capital, a prominent early-stage investment firm, has achieved the final close of its climate and sustainability-focused fund at $135 million. The fund, originally targeted at $100-125 million, made its first close at $70 million in June last year. Avaana aims to support 20-25 early-stage companies focused on innovative solutions in energy transition, supply chain, resources, industrial decarbonization, and food systems.
The fund’s initial investments will range between Rs 10 crore and Rs 30 crore, with plans to provide follow-up funding for successful ventures.
Anjali Bansal, Founding Partner of Avaana Capital, emphasized the profound impact climate change and sustainability will have on social systems, likening it to the digital revolution that transformed economies and societies in recent decades. “The biggest investment opportunities, and subsequently returns, come from innovations in areas undergoing significant transitions,” Bansal noted. “Two mega trends defining our world are artificial intelligence and climate change.”
Avaana’s climate fund is designed to address sustainability, which Bansal sees as the next major challenge to be tackled globally. She believes sustainability will reshape how we live, much like digitization did in the past 30 years.
The fund will provide early-stage capital to startups that demonstrate a core innovation focus in critical areas such as energy transition, supply chain efficiency, and industrial decarbonization. Avaana evaluates startups through a technical lens, guided by the Green Climate Fund (GCF) framework, with an emphasis on climate mitigation, adaptation, and resilience.
The GCF, a major climate financing initiative under the United Nations, is among the key sponsors of Avaana’s Sustainability Fund. Other contributors include the US International Development Finance Corporation, the UK-India Development Cooperation Fund, the Self Reliant India Fund managed by SBI Ventures, Small Industries Development Bank of India (SIDBI), Azim Premji Trust, and several large corporations.
Avaana has already invested in six startups through this new fund, including Kazam, which provides electric vehicle charging solutions; Sentra World, a platform supporting ESG (environmental, social, and governance) initiatives; and agritech company Eeki Foods.