Venture capital firm Aavishkaar Venture Management has concluded three partial exits from its microfinance and micro-venture capital funds as it looks to invest Rs 5,000 crore in India's social enterprises over the next 10 years. While the Silicon Valley-based VC firm Canaan Partners has picked up half its stake in microfinance firm Equitas, Grassroots Business Fund is backing two portfolio companies of Aavsihkaar Micro Venture Capital Fund.
"We believe the conventional model of venture capital investing holds significant potential for catalyzing development in the country and these exits unearth the value we have been building. These exits would accelerate our efforts to raise and deploy Rs 5,000 crore in rural India over next 10 years through multiple funds,” said Vineet Rai, founder of Aavishkaar in a statement.
Aavishkaar Management is currently raising its second microfinance focused fund, Aavishkaar Goodwell II, targeting $100 million. The fund has received a commitment of up to $15 million from International Finance Corporation, the private investment arm of the World Bank.
Aavsihkaar added that it continues to have 'a meaningful stake' in Equitas, Servals Automation and Shree Kamdhenu Electronics.
Aavishkaar reportedly netted an eightfold return on its investment in Chennai-based Equitas Microfinance, which focuses on urban clients. Aavishkaar Goodwell was one of the first backers of Equitas and invested Rs 6 crore in the firm. Equitas earlier also gave a stellar exit to Kalpathi Investments, who in January this year sold a 10% stake for Rs 44 crore to Sequoia Capital, making 12x returns.
Grassroots last month said it is investing in energy self-sufficiency firm Servals Automation and Shree Kamdhenu Electronics Pvt Ltd, a company developing technology for the dairy industry. Aavishkaar India Micro Venture Capital Fund invested an initial Rs 10 lakh in Servals nearly a decade ago, while it invested Rs 20 lakh in Shree Kamdhenu in 2003.
Shree Kamdhenu Electronics is working to improve the technological gap and lack of transparency in India’s dairy industry-- the world's largest source of milk. Servals Automation, a social enterprise whose solution to poverty emphasizes energy conservation, green energy generation, and reduced carbon emissions in India.