Aavishkaar Capital, the impact investing arm of Aavishkaar Group, on Wednesday announced first close of its eighth impact fund, raising $130 million (Rs 1,000 crore).
The firm said that looking at the investor interest in the impact investing space, the fund will be looking to increase its size over the next few months.
The fund is floated by British International Investment (BII) – formerly known as CDC Group Plc., Swiss Investment Fund for Emerging Markets (SIFEM AG), Fund of Funds for Startups (FFS) and managed by Small Industries Development Bank of India (SIDBI) and Self Reliant India Fund (SRI Fund).
It invests in businesses, primarily small and medium-sized enterprises (MSMEs), that use technology as a key enabler in the main sectors of sustainable agriculture, financial inclusion, and vital services, with a focus on climate-tech. Companies operating in the EV (electric vehicle) sector, waste management, and sanitation, among other areas, could benefit from climate-tech investments, Aavishkaar said in a statement.
“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.
Aavishkaar’s proven track record in delivering impact positions it as an important co-investing partner with a proven ability to facilitate greater financial support to India’s innovative entrepreneurs in businesses across sustainable agriculture, financial inclusion and essential services,” said Srini Nagarajan, Managing Director and Head of Asia, British International Investment.
He added, "We are proud that our latest investment, which forms British International Investment’s fourth commitment to this fund manager, will help accelerate scalable impact for low-income and underserved communities, creating more jobs and expanding economic opportunities throughout India.”
Vineet Rai, Sushma Kaushik, Anurag Agrawal, and Tarun Mehta of Aavishkaar Capital Partners will lead the AIF VI, which has a robust acquisition pipeline with the first transaction slated to close in Q1 2023.
Aavishkaar Capital-advised funds have made 62 investments in India to date, with 38 full and partial exits.
In January, Aavishkaar Capital partnered with KfW, a German state-owned investment and development bank, to launch an “ESG First Fund” focused on strengthening the Environmental, Social and Governance (ESG) practice of mid-cap businesses while offering them flexible capital to scale to new markets.
The ESG First Fund is a $250 million fund focused on investing in Africa and Asia with the mandate of generating superior ESG outcomes and commercially viable financial returns alongside positive social impact.