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Export Development Canada (EDC) has made its first equity investment in India. EDC has invested $7.14 million (CAD 7.5 million) in the second SME fund of the Indian private equity firm Avigo Group. The Delhi-based fund will invest these funds in Indian companies that have "the potential to strategically match the expertise of Canadian exporters in key industries", a release said.

Eric Siegel, President and CEO of EDC, said. "The small and medium enterprises supporting India's booming market are developing at a significant rate and EDC must find new ways to help Canadian exporters take advantage of these tremendous opportunities."

Avigo was founded in 2003, and its founding members include Achal Ghai, a former Director - Western Canada, at CIBC. The Avigo SME Fund I was launched in 2004, from which five investments were made in the manufacturing, auto components and pharmaceuticals sectors. The fund was fully invested in 2005.

Avigo is in the process of completing fund raising for its second fund, the $125 million Avigo SME Fund II. It will have both international and domestic investors like EDC. It will fund SMEs at growth stage, pre-IPO stage and buyouts with an average investment size between $2 million and $7 million.

EDC is Canada's export credit agency, which works with some 6,400 Canadian companies, who export to some 200 countries.