Former execs at Norwest, Freshworks set up $300m fund for B2B, SaaS startups

India-based Avataar Ventures, established by former Norwest Venture Partners exec Mohan Kumar and ex-Freshworks chief operating officer Nishant Rao, has launched a US$300 million venture fund for business-to-business and software-as-a-service companies in India and Southeast Asia.

HarbourVest Partners, a US-based private equity investment firm, is the fund’s sole limited partner, according to a report by The Economic Times.

Photo credit: Alex Kotliarskyi.

Avataar Ventures has already acquired six SaaS companies from the Norwest portfolio, namely Zenoti, Capillary Technologies, Appnomic Systems, CRMNext Inc, Manthan Systems, and ElasticRun. Kumar and Rao did not disclose any financial details of the block purchase, but all of the entities were part of the former’s portfolio during his time at Norwest.

Some of the companies have also raised primary capital separately this year, according to the report.

“We are putting in additional capital in each of the six companies, whether they are or aren’t raising funds. We believe the companies can scale and exit – through M&A or IPO – but this hasn’t happened yet here. This fund is about that,” Kumar said.

Avataar Ventures intends to inject US$10 million to US$30 million in its portfolio companies and aims to make around 10 investments from its first fund.

“The focus is to back companies with at least US$15 million in recurring revenue and scale that to US$100 million,” Kumar said.

The fund is currently in the process of setting up shop in the US and looks to bring in multiple operating partners over the course of the year, according to the report.