Avaana Capital closes $135 million fund to drive climate-focused ventures in India

In a major boost to climate-focused entrepreneurship, Avaana Capital, an early-stage investment firm, has announced the final close of its climate and sustainability-focused fund at $135 million, surpassing its initial target of $125 million.

Avaana Capital, renowned for supporting startups in the consumer, food, and agri-sectors, is using this dedicated fund to back transformative companies that are developing commercially scalable solutions for India’s biggest environmental challenges. The firm plans to invest in around 20 to 25 early-stage companies through this fund.

According to Anjali Bansal, Partner at Avaana Capital, the investment strategy for the fund focuses on sectors responsible for around 90% of India’s emissions and 70% of its economy.

“The thesis here is addressing a large problem with equally large market opportunities,” said Bansal. Avaana Capital aims to make an impact in three core areas: energy and resource management (covering energy transitions, water, land, air, and natural resources), food systems (including sustainable agriculture, precision agriculture, and synthetic bio), and the circular economy (including supply chains, mobility, alternative materials, and plastic circularity). By focusing on these areas, Avaana Capital hopes to drive scalable, impactful change that aligns with both India’s economic growth and its environmental commitments.

Bansal noted that the firm sees approximately 1,000 new investment opportunities each year. “When we started, we wondered if there would be enough to invest in, and we’ve now shown that there certainly is. We’ve already made about 10 investments, with a target of reaching 20-25 for this fund,” Bansal added.

The firm’s portfolio includes trailblazers like FarMart, Ekei Foods, Ninety One Cycles, and Kazam, each addressing crucial sustainability challenges in their respective fields. For instance, Ekei Foods is revolutionizing food production by cultivating tomatoes, cucumbers, and eggplants in Rajasthan’s deserts, where temperatures reach up to 50°C, while using 80% less water than traditional agriculture.

The fund’s ambitions are also closely aligned with the larger narrative of India’s climate responsibility and development trajectory. Over recent years, Avaana Capital has been instrumental in advancing the climate tech discourse, emphasising the urgency of tackling climate change with both speed and scale. Bansal underscored India’s indispensable role in the global climate solution, stating, “The world cannot solve for climate without India, and our approach must balance our development journey with climate solutions,” emphasising that India’s climate initiatives must operate alongside its growth goals.

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