HomeFinanceStartup investment through convertible notes has waned: Shivam Bajaj, CEO of Avener Capital

Startup investment through convertible notes has waned: Shivam Bajaj, CEO of Avener Capital



Speaking to the TechGraph editorial team, Shivam Bajaj Founder & CEO of Avener Capital said, “Investors are no longer keen to invest in start-ups through convertible notes. Instead, they seek direct valuations.”

Read the complete interview:

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TechGraph: Could you give us a sense of how far Avener Capital has come since its existence?

Shivam Bajaj: Avener Capital was set up in 2018 to help companies raise capital efficiently from the private market. The goal is to develop the right capital structure and/or deal structure to drive maximum value for the stakeholders involved. We offer value-driven solutions for multiple areas in the investment banking space such as cross-border transactions, PE Advisory, M&A Advisory, and structured finance advisory.

As of today, we have advised transactions worth more than Rs.30,000 crore across two verticals – real assets and emerging clients. Our marquee transactions include GIC’s investment into IRB Infrastructure Trust which involved an equity raising of Rs.4,400 crore, Ferrovial and GIC’s investment into IRB Infrastructure which is the largest equity fund-raise for an Indian Infrastructure HoldCo of Rs.5437 crore.

In the emerging market space, we are closely working with several start-ups in the D2C, fintech, and SaaS sectors, helping them raise growth capital.

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TechGraph: What does the deal-making environment look like amid looming recession fears?

Shivam Bajaj: When it comes to start-up/private market valuations, the US has witnessed significant corrections in valuations. Private equity and venture capital have recently repriced their funding rounds in the US due to geopolitical issues, inflation, and Fed rate hikes.

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However, the start-up valuation correction in India has not been that steep compared to the corrections witnessed in the US and other markets.

The Indian startup ecosystem has managed to have a relatively low correction in valuation due to the high amount of dry powder of VC/PE funds. Having said that, the valuation correction has led to certain structural changes. For example, funding round sizes are getting smaller as founders avoid higher equity dilution.

In addition, investors are no longer keen to invest in startups through convertible notes. Instead, they seek direct valuations. Moreover, investors now assess the valuation of startups based on revenue multiples, not GMV multiples. Revenue multiples too have come down.

TechGraph: How do you see technologies namely Artificial Intelligence and Machine Learning, about their relevance across the sector? What does the future look like?

Shivam Bajaj: New-age technologies such as big data, artificial intelligence (AI), and machine learning (ML) have emerged as growth enablers across sectors.

As credit growth and economic development are interrelated, we witnessed aggressive adoption of these new-age data-driven technologies in the financial services sector and going forward.

AI and ML will play a more critical role in boosting operational and risk management efficiencies in a meaningful way, and financial companies will continue to invest in building those tech competencies.

TechGraph: What is Avener Capital’s fund approach to the current market? Are you looking at new markets or using more stringent norms to evaluate a business?

Shivam Bajaj: We do not manage funds. We are a pure-play financial advisory firm. In the prevailing market scenario, on the real asset side, we continue to focus on guiding investors toward achieving inflation-adjusted returns. For our emerging markets division, our approach continues to remain sector-agnostic.

We work with growth-oriented companies to raise growth capital. While evaluating real asset investment opportunities, we adopt a balanced and conservative approach. Our goal is to guide investors into growth investing by outlining growth prospects as well as inherent risks so that they can make informed decisions.

TechGraph: Lastly, what does the future hold for Avener Capital?

Shivam Bajaj: We have a robust pipeline of deals both in the real asset and emerging market divisions. Our team is laying the foundation to efficiently execute those lined-up deals.


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Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

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