Aavishkaar hits $130m first close on latest India impact fund
Aavishkaar Capital has reached a first close of INR 10bn (USD 130m) on its latest India impact fund. It is reportedly targeting a final close of USD 200m.
This is Aavishkaar’s eighth impact fund overall and its sixth dedicated to India. The firm described it as on track to be its largest vehicle yet, doubling the size of its predecessor on the back of strong investor interest in impact.
UK-based CDC Group, which formally rebranded last month as British International Investment (BII), and Swiss Investment Corporation are the anchor LPs. This is BII’s fourth commitment to Aavishkaar. The development finance institution (DFI) announced a strategic pivot to Asia in November.
Additional contributions have come from the Swiss Investment Fund for Emerging Markets, Self Reliant India Fund (SRI Fund), and Fund of Funds for Startups (FSS), which is managed by Small Industries Development Bank of India. SRI Fund and FSS are both backed by the Indian government.
Aavishkaar India Fund VI will invest primarily in micro, small and medium-sized enterprises (MSMEs) with technology as a key enabler. Focus areas include sustainable agriculture, financial Inclusion, essential services, and climate-tech. The aim is to build both commercially attractive and impactful businesses.
The fund will be led by Aavishkaar partners Vineet Rai, Sushma Kaushik, Anurag Agrawal, and Tarun Mehta. Rai, who established Aavishkaar in 2001, is considered a pioneer of impact investing. The team claims to have a healthy deal pipeline with the first transaction expected to be consummated in the first quarter of 2023.
The vehicle is being touted as the first 2X certified flagship fund in Asia, which references the 2X Challenge, an initiative to promote DFI investment in women. The idea is for 30% of the underlying portfolio investments to meet 2X criteria related to women’s empowerment as entrepreneurs, business leaders, employees, and consumers.
“Our strengthened partnership with Aavishkaar Capital is based on a joint objective to increase access to capital for early-stage tech-driven businesses, enabling them to transition from proof-of-concept to growth in their operations,” Srini Nagarajan, BII’s head of Asia, said in a statement. “Aavishkaar’s proven track record in delivering impact positions it as an important co-investing partner.”
Aavishkaar is said to be India’s oldest homegrown impact investor with about USD 500m in assets under management aligned to 13 out of the UN’s 17 sustainable development goals. It has made 62 investments in India to date and realised 38 full and partial exits. The firm also invests across developing Asia and sub-Saharan Africa.
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