Avataar Venture Partners expects at least three liquidity events from its first fund and two from its $350 million second fund within the next 18-20 months, a top executive at the growth investing firm told Mint.
“We're expecting a couple of our mature companies to list in 2027 or early 2028,” Mohan Kumar, founding managing partner at Avataar Venture Partners, said in an interview. “By 2028, we'll have three public companies.”
He declined to name which of the firm's portfolio companies were considering initial public offerings (IPOs). One of its portfolio companies, Insurance Dekho, is considering going public with a $250 million raise through a mix of new shares and secondary sales, Bloomberg first reported in February.
On whether these IPOs could deliver outsized returns, Kumar said they could return at least “half the fund and a little bit more”.
Avataar has already secured at least two partial exits from its first fund via the public markets: loyalty SaaS provider Capillary Technologies, which listed in November 2025, and cloud streaming platform Amagi, which launched its IPO in January 2026. The firm continues to hold a stake in Capillary because it also invested in the company through Fund II, which is nearly completely deployed.
From late last year to early this year, venture funds saw a slew of exits as mature companies headed for the bourses, leaving funds with large pools of capital. They are now looking to redeploy this capital into a fresh crop of startups, with tech companies finally gaining ground in a market historically dominated by traditional industries.
SaaS-to-deeptech pivot
While Avataar’s successes from its first fund were rooted in traditional software-as-a-service (SaaS) and cloud, the firm is betting that its next generation of 'fund returners' will come from a different stable: deeptech.
Avataar expects its deeptech investments, including quantum computing startup QpiAI, physical AI platform Infinite Uptime, and predictive fleet management firm Intangles, to drive significant returns as they mature over the next few years. “We expect at least a couple of them to be fund returners,” said Kumar. “But that will be a little later.”
Deeptech investors traditionally take a long-term view, as intensive research and development are the primary drivers of growth. However, the potential rewards are significant. By building proprietary intellectual property and defensible technological moats, these companies often command premium valuations. So whether an exit is achieved through an acquisition or an IPO, the gains tend to be outsized.
This is exactly why Avataar has doubled down on physical AI, enterprise AI and quantum computing as it raises its third fund, with a target of $400 million. In fact, the firm had already pivoted toward deeptech and business-to-business companies in its second fund.
Avataar is also bullish on the AI opportunity in life sciences, specifically in accelerating drug discovery, an area that was not previously a priority for Indian pharma companies. “AI is going to do things that previously weren't possible. We believe it will be a game-changer and you won't need a huge amount of talent or PhDs,” Kumar said.
Kumar said, however, that firm wouldn't be looking at space tech, given the lack of variety in the sector. His comments come at a time when orbital launches from the first wave of space tech companies are expected. Most early-stage investors, however, prefer to back startups further up the value chain, in specialized sectors such as space-based data centers and earth observation satellites.
Overall, the firm's investment philosophy won't change too much, Kumar said. As with the second fund, Avataar is looking to lead funding rounds with cheques of $20-50 million for stakes ranging from 10-25%. It plans to invest in 15-20 startups with the third fund.
Tough year for IPOs
While Avataar is looking at a 2027-28 window for its listings, the immediate horizon for public debuts appears clouded. In March, Mint reported that merchant bankers expect the pace of IPOs to slow in 2026 unless market sentiment stabilizes amid the conflict between the US, Israel and Iran.
“If current market conditions persist, IPO activity is likely to moderate meaningfully compared to 2025,” said Gaurav Bhandari, chief executive at financial services provider Monarch Networth Capital Ltd.
As of 12 March, returns from 2026 IPOs averaged a 0.3% premium across 45 issues, the weakest aggregate listing performance since at least 2019, according to data from market intelligence platform PRIME Database.