Avaana Capital Raises Largest Climate-tech VC Fund Of $135mn

Anjali Bansal & Swapna Gupta, Partners, Avaana Capital

Indian climate-focused venture capital company Avaana Capital has announced the final close of its Avaana Climate and Sustainability Fund with a total fund size of USD 135 million.

The firm said that being India’s largest institutional climate focused venture capital fund, the Avaana Climate and Sustainability Fund is working to invest in early-stage companies that leverage technology to create scalable solutions for climate mitigation, adaptation, and resilience accelerating India’s journey to net zero.

The fund focuses on three core sectors that account for 90% of India’s carbon emissions: Energy and Resource Management, Mobility and Supply Chains, and Sustainable Agriculture and Food Systems.

The fund has attracted strong support from renowned institutional investors, including the world’s largest climate fund, the Green Climate Fund (GCF) making its first direct investment in India.

“This demonstrates the recognition of the transformative role venture funds focused on technology and innovation play in shaping low-emission and climate-resilient pathways. Other key participants include the U.S. International Development Finance Corporation (DFC), UK Government through UK- India Development Cooperation Fund (UKIDCF), the Self Reliant India (SRI) Fund and Small Industries Development Bank of India (SIDBI), Azim Premji Trust and several large corporations,” the company said in a statement.

India is one of the world’s most climate-vulnerable nations. With the largest population and the sixth-largest economy, the country plays a crucial role in global climate solutions. Estimates suggest that India will need investments exceeding USD 10 trillion by 2070 to meet its net-zero targets and address the growing risks of climate change. Avaana’s investments are designed to meet this urgent need by driving innovation that reduces emissions, improves resource efficiency, and accelerates the transition to a low-carbon economy.

Anjali Bansal, Partner, Avaana Capital, commented “India is at a pivotal moment in its climate action journey. The support we’ve received from leading global and domestic institutional investors underscores the importance of innovation in driving climate action and delivering long-term impact. The Avaana Climate & Sustainability Fund will help build the next generation of climate-first companies to transform key sectors and make meaningful progress toward a sustainable future.”

Furthermore, Mateo Goldman, Senior Vice President for Investments at the U.S. International Development Finance Corporation (DFC), said “Our investments around the world are boosting development in emerging economies and we see immense potential in India. DFC’s support for Avaana’s climate fund is a great model to push early-stage startups in India, dedicated towards new technologies and innovation, and deliver impactful, climate-resilient solutions. This will help to accelerate India’s transition to a low-carbon economy and thereby contribute to the global push for sustainable development.”

Swapna Gupta, Partner, Avaana Capital added “India is currently at the cusp of a sustainable transformation led by frontier technologies in climate science. By fostering a collaborative ecosystem and providing climate focussed capital, we will work with innovative startups developing technologies that address the pressing challenges of climate change. With the strong support of global partners, we aim to accelerate this transformation.”