India's Lok Capital reaches $40m first close on third fund
Indian venture capital firm Lok Capital has reached a first close of $40.5 million for its third fund, which is targeting a $100 million total corpus within 12-18 months.
Participating LPs include international development finance institutions in Lok's existing investor base, such UK-based CDC Group, Netherlands Development Finance Company and France's Proparco. US-based TIAA Global Asset Management came in as a new investor.
Lok Fund III will be deployed across the next five years and will focus on growth-stage investments in financial services, healthcare, agriculture and livelihood. The average tranche per investment will range between $2-10 million. Lok is expected, however, to collaborate with LPs on joint investments in larger deals.
"Aided with the government initiatives from the last few years along with very progressive regulatory environment, the climate is ripe in India for deepening financial inclusion through both traditional business models as well as through fintech models," Venky Natarajan, managing partner at Lok said in a statement.
Within the financial technology segment, the fund will invest in small and medium-sized enterprise finance, affordable housing finance and digital-enabled financing. Healthcare commitments, meanwhile, are expected to target the provision of affordable services, devices and diagnostics in underserved geographies. Agriculture investments will seek opportunity in dairy businesses, supply chain management and integrated farm-to-fork models.
The close brings Lok's total capital under management to more than $125 million. The firm claims its first fund has fully returned its committed capital of $22 million with an IRR of 15%. Fund II is reported to be presently tracking gross returns of 28% in US-dollar terms.
Founded in 2004, Lok aims to foster inclusive socioeconomic growth through development investments targeting companies that cater to India's large, underserved population segments. Previous investors have included German development bank KfW Bankengruppe, Dutch asset manager Triple Jump and the International Finance Corporation.
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