Avataar Venture Partners (AVP) has launched a new fund worth $350 million to support Software-as-a-Service (SaaS) and business-to-business (B2B) start-ups.
Before this new launch of $350 million, AVP had raised two new funds. Following its internal investment pattern, the Bengaluru-based investment company usually invests $10 million to $50 million in companies with an Annual Recurring Revenue (ARR) of over $10 million. It helps them increase their scale beyond $100 million to $150 million in ARR.
"Avataar is uniquely positioned to invest in growth-stage SaaS and B2B Tech companies with $10-30 million ARR in the current market environment. This is a great vintage to invest in SaaS; the unrealistic hype in the market is gone favouring founders with superior execution and profitable business models," Mohan Kumar, founder and managing partner of Avataar, told Moneycontrol.
The SaaS market has been witnessing rapid growth in India. According to a recent EY-CII report, it is expected to grow multi-fold by 2025, accounting for almost 7 to 10 per cent of the global market, up from the current 2 to 4 per cent.
Founded by Mohan Kumar in 2019, Avataar's portfolio includes companies including media software unicorn Amagi and publicly-listed pricing platform RateGain. Wellness unicorn Zenoti also raised $160 million in a Series D funding round from various investors, including AVP, in 2020.
In the B2B space, it was amongst the early investors in ElasticRun, a distribution unicorn.
"Three out of nine Avataar companies are already past $100 million ARR/$1 billion gross merchandise value, with another three to four on track to hit the milestone in the next couple of years," Nishant Rao, founding partner and former operations chief of Freshworks, told Moneycontrol.