Avataar Venture Partners, which has subsidized unicorn software program startups along with Amagi, Zenoti, and others, has released its 2d fund with a corpus of $350 million.
Fund II of a business-to-business (B2B) technology provider closed three years after closing its first $300 million fund and less than two years after closing a subsequent $100 million fund to invest in some portfolio companies. It came out of nowhere.
“We usually back 10-15 companies in a fund and make sure we offer all the help. But we can work with only so many companies at a time and that explains the thesis behind a $350 million fund, We might go up to $400 million with this fund but not more than that. We will never be a $1 billion fund because we won’t be able to service it.” Kumar said.
He further added that “Avataar’s second fund closed the first at just over 50% of the total. Final closure is expected in March 2023”.
Kumar, former partner of Norwest Venture Partners, and Nishant Rao, former COO of software-as-a-service (SaaS) company Freshworks launched Avataar Venture Partners in 2019. As our first fund, we have selected a global fund, HarborVest, as our sole limited liability partner or sponsor.
With the second fund, the venture capital firm is expected to sustain investment momentum supporting 10 to 15 startups with average-sized checks.
Fund II will close three new investments by mid-November, focusing on B2B technology companies such as Healthcare, Urban Mobility, Agricultural Technology, Deep Tech, Blockchain, and DevOps.
RateGain Travel Technologies, Avataar’s portfolio company that provides software for the hospitality industry, went public on the Indian Stock Exchange last December.
Around the same time, Capillary Technologies, Avataar’s retail customer relationship management (CRM) software provider, also submitted a draft prospectus.
Avataar’s second fund comes at a time when global tech stocks are losing money as markets react to inflationary pressures and high-interest rates.
