Avataar Ventures New Fund for B2B and SaaS Startups
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Avataar Ventures New Venture Fund for B2B and SaaS Startups

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Avataar Ventures New Fund: The venture capital fund Avataar Venture Partners, was founded by former executives of Freshworks Inc. and Norwest Venture Partners, with a goal corpus of $350 million (about 2,800 crores). The fund will invest in 12 to 15 growth-stage firms that use software-as-a-service (SaaS) and business-to-business (B2B) business models.

According to Mohan Kumar who is the founder and managing partner of Avataar, “The amount of the new fund maybe increase to $400 million. The size of the investment check will range from $15 million to $50 million. With this new fund, we have already completed one $15 million deal. There are plans for two additional investments”. Avataar, based in Bengaluru, plans to support up to 15 companies through the new fund from the Series B through D stages for an average of at least seven years, with an average ticket size of $35 million.

In the healthtech, agritech, and deep tech sectors, the investment will be split between 60–70% SaaS and 25–25% B2B marketplaces, said Kumar.

Nishant Rao, formerly the COO of Freshworks, and Kumar, formerly the executive director at Norwest Venture Partners, launched Avataar. It made the final close of its $100 million Opportunities Fund for top-up investments in particular portfolio companies as well as new investments public in February of last year.

The founders of Avataar are Nishant Rao, a former chief operating officer of Freshworks, and Kumar, a former executive director of Norwest Venture Partners. It announced the final close of its $100 million Opportunities Fund in February of last year, which was intended for fresh investments as well as top-up investments in a few portfolio companies.

Its initial fund has backed 10 businesses, including B2B rural commerce platform ElasticRun, wellness and fitness SaaS unicorn Zenoti, media and fast SaaS company Amagi, travel, and hospitality SaaS firm RateGain, and BFSI SaaS CRMNext, among many others.

“The prevalence of unicorns will allegedly decrease by 50% during the next 18 to 24 months. A unicorn does not discuss the company’s fundamentals; it only discusses valuations. It does not measure how successful a company is”, as per Kumar.

Avataar tends to adhere to three crucial measures when investing in businesses through its new fund: annual recurring revenue (ARR), gross margin, and net revenue retention (NRR).