Avaana Capital, a venture capital firm focused on climate solutions, has announced the final close of its $135 million Sustainability Fund. The fund aims to support early-stage startups that develop innovative solutions to address climate change. The fund will focus on sectors that significantly contribute to India’s carbon emissions.
These sectors include energy and resource management, mobility and supply chains, and sustainable agriculture and food systems. The Avaana Climate and Sustainability Fund has received strong backing from several major institutional investors. The Green Climate Fund (GCF), the world’s largest climate-focused fund, has made its first direct investment in India through this initiative.
Other notable backers include the U.S. International Development Finance Corporation (DFC) and the UK Government through the UK-India Development Cooperation Fund (UKIDCF). The Self-Reliant India (SRI) Fund, the Small Industries Development Bank of India (SIDBI), and the Azim Premji Trust have also invested, alongside several large corporate supporters. Avaana Capital plans to invest in 20 to 25 early-stage startups.
The initial investment range will be between Rs 10 crore to Rs 30 crore per company.
avaana’s $135 million climate fund
The firm also retains the flexibility to increase its stake in companies that show significant progress.
The focus is on fostering cutting-edge technologies that have the potential to revolutionize sectors critical to India’s sustainability goals. Anjali Bansal, Partner at Avaana Capital, highlighted the importance of innovation in climate action. “The support from leading global and domestic institutional investors underscores the importance of innovation in driving climate action and delivering long-term impact,” Bansal said.
“The Avaana Climate and Sustainability Fund will help build the next generation of climate-first companies to make meaningful progress toward a sustainable future.”
India is projected to require over $10 trillion in investment by 2070 to achieve its net-zero targets. Avaana Capital’s fund is part of a broader effort to drive innovation in climate mitigation and adaptation. Kavita Sinha, Director at the Green Climate Fund’s Division of Private Sector Facility, emphasized the alignment between Avaana’s focus and the GCF’s vision.
“Avaana’s focus on transformative technologies in critical sectors will provide climate-aligned solutions to people and support India’s climate ambitions,” Sinha said. “This partnership will accelerate India’s net-zero journey and create scalable models for other emerging markets facing similar challenges.”
The announcement and strategic goals of Avaana Capital underscore a significant commitment to fostering innovative climate technologies. These technologies could potentially offer scalable solutions not only for India but for other emerging markets as well.
