Private SaaS Fund Formed Through Investor-Entrepreneur Combo

No two investment funds are set up the same way. They are each comprised of unique individuals which bring distinct backgrounds to the table. Increasingly, however, some have found that combining investing skills with business building acumen can increase the probabilities of outsized returns. And institutional limited partners, the investors in venture funds, seem to believe in such a combination. The latest example can be seen in HarbourVest’s recent $300 million investment as the single backer of a new fund.

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Two accomplished individuals have joined forces to start Avataar Venture Partners, a $300 million private fund based in India that will invest $10 to $30 million in B2B and SaaS companies. Mohan Kumar brings the investment background, having most recently been a partner at U.S. based Norwest Venture Partners. He is joined by Nishant Rao, the former chief operating officer of Chennai-based SaaS company Freshworks.

As part of the new fund, Avataar has purchased in a bulk sale Norwest’s ownership stakes in six companies that Kumar was previously managing. These companies include Zenoti, Capillary Technologies, Appnomic Systems, CRMNext Inc, Manthan Systems and ElasticRun.

Kumar states, “The focus is to back companies with at least $15 million in recurring revenue, and scale that to $100 million. We have a very hands-on approach, and are not just going to be putting in capital, but also work deeply with them operationally.”

While support will be allocated to the initial six portfolio companies, Avataar will be looking to brings its total portfolio to ten companies and inject additional capital to aggressively scale growth.

Rao adds, “This is the first operational growth stage-focused venture fund in India. For B2B companies, this stage is critical, and they require operational assistance, and not just cash to get to the next level.”

As for their major and only backer HarbourVest, “…we are delighted to be partnering with Avataar to provide the necessary resources for the companies to reach their maximum potential and we look forward to working with the team as it executes its strategy of scaling these companies into global businesses,” said Tim Flower, Managing Director at HarbourVest Partners.