Avataar Venture Partners, a growth-stage investor focused on technology, said it had launched its latest fund with a target size of $350 million. For the first time, the fund has struck deals with large institutional investors from the US, Europe and West Asia.

Avataar, founded in 2019, said the launch of the new fund highlights a huge market opportunity in the business-to-business (B2B) technology and software-as-a-service (SaaS) sectors, which are in the funding winter.

“In the current market environment, Avataar is uniquely positioned to invest in growth-stage SaaS and B2B technology companies with $10-30 million ARR (annual recurring revenue),” said Mohan Kumar, managing partner at Avataar. “Indian SaaS companies can build global businesses more efficiently – spending less than half of every dollar of ARR they earn compared to their global counterparts.”

Avataar has started investing from its new fund and is in multiple discussions with companies raising early-stage growth rounds, including Series C rounds.

Avataar’s portfolio includes some of India’s top global SaaS companies: media software unicorn Amagi, travel and hospitality tech company RateGain, and health SaaS unicorn Zenoti. It also focuses on B2B technology businesses serving the Indian market. For example, it was an early investor in ElasticRun, a unicorn offering a B2B e-commerce platform to reach rural India.

Nishant Rao, Founding Partner of Avatar, said: “Avataar has built its professional operational VC model aligned with the desire to scale ARR from $10 million to over $100 million faster by leveraging the team’s experience of seeing scaling journeys multiple times. “Three Avataar companies have already surpassed $100 million in ARR (and) $1 billion in GMV, and another three to four are on track to reach milestones in the coming years.”

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According to a recent EY-CII report, the Indian SaaS market is expected to grow several times by 2025, accounting for nearly 7% to 10% of the global SaaS market, up from 2% to 4%. Industry data shows that about 70% of the 20 Indian unicorns in 2022 will be B2B companies. Investors see Indian SaaS companies as the new “avatar” of the IT services industry – which generated $227 billion in revenue in FY22.