How Avendus Capital becomes topmost Financial Advisor?

Gorish Dua Gorish Dua
Aug 27, 2020 5 min read
How Avendus Capital becomes topmost Financial Advisor?

The major learning one could take from Avendus Capital is the story of climbing out from early pitfalls. Now, the company has grown to have a part in every lucrative sector in the business circuit. Well, the story of Avendus Capital is more of learning for anyone who belongs to the startup circuit.

The co-founders Kaushal Aggarwal, Ranu Vohra, and Gaurav Deepak have worked efficiently to establish an image of Avendus as one of the most important companies in the circuit. Well, how did the company rise after falling into potholes multiple times? Letโ€™s check it out!

Quick Facts - Avendus Capital

Company Name Avendus Capital
Headquarter Mumbai, India
Industry Financial Services
Founder Kaushal Aggarwal, Ranu Vohra, and Gaurav Deepak
Founded 1999
Parent Organization Avendus Capital Pvt. Ltd.

How Avendus Capital Launched?

It was a typical September morning in 2004 when Ranu Vohra, took a flight from San Francisco to Mumbai. He broke into a cold sweat as a call from Neeraj Gupta, the CEO of Cymbal Corporation left him shocked. Vohra parked himself at Cymbalโ€™s headquarters at California for the previous weeks and was firming up the final contours of the brandโ€™s sale to Patni Computer Systems in India. Well, by the time he completed work the previous evening, all the creases had been ironed out and it was a matter of time that the deal was completed and Avendus Capital, an investment bank was launched.

However, the joy was short-lived as on that call, Gupta told Vohra how the dynamics had changed and Patni wished to take over 90 percent of Cymbalโ€™s workforce after the acquisition. As Vohra recalls, instead of taking a very enjoyable flight home, he traveled with a big question mark in his mind. This deal with Patni was very important for the future of Avendus.

Story of Avendus Capital
Avendus Capital Launching

During the 1990s, internet startups in the United States have triggered a sense of gold rush amongst the venture capital firms. In this phase, the Dotcom bubble was growing day by day and in India, companies like MakeMyTrip, Contests2win, Indianplaza, and Firstandsecond had shown promise in the circuit. Hence, the trio of Vohra, Aggarwal, and Gaurav, who were investment bankers with Communications Equity Associates and ICICI Bank were very much convinced that the startup circuit would hit the Indian circuit very soon.

Next, the trio launched Cool Startups, which was an online startup advisory firm that modeled on in the United States. In January 2000, it started operating in a small office in Mumbai after collecting around INR 2 crore in funding which was headed by Infinity Ventures.

Avendus Capital Funding

Taking about how they were successful in collecting funds, Vohra admits that as three of them were from IITs, the most prestigious institutes of the country, the investors believed in them. The main idea of the trio was to take the company to a certain stable level and then sell it to or someone else who might be interested in the venture.

Unfortunately, the only thing they could not anticipate was the quick incoming of the dot-com bust. As soon as it occurred, it left Cool Startups with no choice but to change tracks. In September, the team morphed Cool Startups into Avendus Capital, which was an investment bank to advise software exporters and business process outsourcing companies.

Story of Avendus Capital
Avendus Capital Funding

Now, the concept of pivot helped the firm and it was barely a blip on Indiaโ€™s investment banking radar. This investment banking radar of the company was dominated by people like Uday Kotak and Hemendra Kothari. Apart from that, there were global heavyweights like Citi, Morgan Stanley, and Deutsche Bank.

Till 2004, Avendus could only collect eight deals. Amongst these, the largest deal was $4 million but the Cymbal deal at $8 million would shine a light on the firmโ€™s ability to perform on the bigger stage, and hence, the firm could bring a financial breather in the circuit.

Hence, to bring things back on track, Vohra coerced Cymbal and Patani to make agreements and for his company, it was light at the end of the tunnel. On October 12, when the deal was announced, the team at Avendus capital treated themselves with bottles of champagne. Well, it was the first taste of success and the company took giant strides since then!

Post Initial Success of Avendus Capital

In the upcoming years, Avendus Capital straddles sectors as diverse as digital, enterprise, technology and services, consumer, financial services, health care, infrastructure and has evolved into a prolific investment bank. Presently, the count stands at 138 merges and acquisitions, with a deal value of $7.7 billion and 164 private equity deals to the tune of $5.7 billion. Avendus Capital now has offices in New York and London runs global mandates in IT and BPO.

As per Vohra, the team found a big white space in the circuit. They observed that the mid-market companies of today have the potential to become the big names of the circuit and hence, the entrepreneurs needed advice.

As there were very few people who offered these services, the situation presented an opportunity where the company could deal with multiple clients rather than be dependent on industries where there were few participants.

Story of Avendus Capital
No. of Deals Done by Avendus Capital in Last 4 Years

So, when the Venture Capital firms started queuing up for Indian startups at the turn of the decade, Vohra, Aggarwal, and Gaurav were among the first who started working off. The team started doing their work in the digital sphere when it was not glamourous. The team built relationships when everyone found that it was nearly impossible to have partners in the circuit.

Hence, Avendus Capital as a company grew stronger and stronger day-by-day. Post-2011, the firmโ€™s digital, media, and technology vertical has cracked 59 fund raises and 11 mergers and acquisitions. The company is also credited with introducing investors like Stripes Group, Valant, Adveq, TPG, and many more to name.

Avendus Capital as an Inspiration

Avendus as a company has seen the highs and lows that are very important for the growth of an organization. Now, as the venture capital firm has the experience and the team knows how to guide the aspiring entrepreneurs, it has a very important role in the future of the Indian startup circuit.

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