India's Aavishkaar to close VC Fund II at $95m, raise SE Asia fund
Aavishkaar Venture Management, which funds enterprises in India’s rural areas, is to close the Aavishkaar II fund at $95 million. Investors include the International Finance Corporation, Cisco, KfW, FMO, CDC Group and Rianta Capital, a London-based family office. The VC firm is also raising capital for a Frontier Fund, which will target investments in Indonesia, Myanmar, Bangladesh and Sri Lanka.
Fundraising for Aavishkaar II started in January 2011, with a target of $120 million. It reached a first close at $70 million in September 2011.
The fund will invest in enterprises active in the social infrastructure sector in rural India, in the renewable energy, agriculture, health and education sectors.
So far, $17 million from the fund has been deployed across eight deals. These include investments in Vortex Engineering, a developer of low-cost, solar-powered ATMs, Utkarsh Microfinance, biomass energy developer Vana Vidyut and Karadi Path Education Company, which develops English language learning products.
This is Aavishkaar's fourth fund: Aavishkaar I closed in January 2009 at $14 million; Aavishkaar Goodwell I, which provides capital to microfinance institutions, reached final close in May 2008 at $18.3 million; and a follow-on fund, targeting $80 million, had a second close at $31 million in June 2012.
The firm is looking to raise $60 million for the Frontier Fund, whicih may also operate in Pakistan, depending on the amount of support received. Aavishkaar is looking for investors from Japan and other Asian countries and expects to reach a first close in September.
The firm's managing director, Vineet Rai, told AVCJ that the new fund will back enterprises that offer high-quality education or health services at low prices. They are also interested in Indonesia's renewable energy sector, and will build a local team to develop investments in the country.
Aavishkaar's last exit was in 2012, when the firm sold its stake in Rangsutra, an artisan-owned handicrafts company, to three high net worth individuals. In 2010, it sold half its stake in microfinance firm Equitas to Canaan Partners.
Aavishkaar has also made partial exits from Servals Automation, a rural energy solutions provider and Shree Kamdhenu Electronics, an electronic milk collection services company.
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