Fundraising in the digital sector has clocked the fastest rebound since the Covid-19 crisis hit businesses worldwide, according to Gaurav Deepak, CEO of homegrown financial services firm Avendus Capital.
Besides technology, pharma and food have come back strongly while IT services continues to remain robust, he said.
The Mumbai-headquartered Avendus continues to be at the forefront of technology dealmaking in India, advising some of the country’s top startups in raising capital at a time when digital businesses are seeing greater interest from investors compared to other sectors.
Over the course of this year, Avendus helped close over 30 deals across sectors, including fundraising for some India’s top consumer internet majors like Dream11, Unacademy, Onsitego, Eruditus, Nykaa, and PolicyBazaar, according to data shared by the firm with ET.
“The big will get bigger, as we are oversubscribed in our unicorn deals,” Deepak said.
He said the Indian government’s revised FDI policy on Chinese capital would not impact startups significantly.
The massive fundraising by Jio Platforms will bolster the India tech story, Deepak said, adding that investors are not deterred from betting on companies competing with Reliance.
“The Jio Platforms raise will help the ecosystem expand massively,” he said. “We keep talking about market share and not about market size at all. How much adoption, how much change of behaviour, will the physical industry suffer? The value creation will happen in the market size and cost of customer acquisition. Market share change of 5% to 10% here and there will not matter. Every industry will end up with two-four players.”
Backed by bulge-bracket PE firm KKR and mid-market fund Gaja Capital, Avendus recently executed an organisational change among its three founders. Ranu Vohra handed over the CEO role to Deepak. Vohra is now executive vice-chairman. Kaushal Aggarwal will stay on as chief executive of Avendus Finance to drive its credit solutions business, which has been identified as the new major growth area for the firm.
“The credit part is deeply integral to our business, and will actually fuel a lot of growth for our additional products to all our franchise clients, whether in wealth and investment banking,” Deepak told ET.
On the question of possible acquisitions for its asset management business, Vohra said the scaleup will be through extensions of its current best performing Absolute Return Fund (ARF) in its new portfolio management services (PMS) format led by Andrew Holland and Vaibhav Sanghavi, and Avendus Olivo PMS led by Tridib Pathak.
“This is also a year when some of our products will raise global capital,” Vohra said. “Avendus currently manages an excess of $1 billion and aspires to take it to $3 billion by 2025.”
Avendus will also restart its lending business after the debacle of IL&FS and DHFL last year. “September is going to be the first month where we are going to start lending again to our clients,” Deepak said. “Our book size will end up where it was before, but we will be lending to our entrepreneur clients and to our wealth clients.”