Aavishkaar India Micro Venture Capital Fund has raised fresh capital of around Rs 23 crore ($4.7 million) through a group of new investors and additional capital commitment from an existing investor, taking its total funds under management to $11.3 million.
The new investors include Oasis Fund (part of Swiss investment advisory firm Bamboo Finance which specialises in financing social entrepreneurship), FMO (Dutch development finance company), Dreilinden GmbH (German social investment group) and George Avenue CV (a private equity fund initiated by Europe’s Noaber Foundation) are together picking 39% stake in the Mumbai-based VC firm for around Rs 18.3 crore.
Besides, Dutch foundation CORDAID is putting in Rs 4.25 crore taking its total capital commitments in Aavishkaar India Micro VC Fund to Rs 10.4 crore. It has now become the single largest shareholder of the VC firm. Earlier it had the same stake as Aavishkaar International with capital commitment of Rs 6.15 crore each.
When contacted, Vineet Rai CEO and founder of Aavishkaar India Micro VC Fund, said, “The current closing happened in June (2008), but we got FIPB clearance only now.” He added that with this infusion the fund has raised $11.3 million, which is proposed to touch $15 million by January 31 (the final close).
Other investors in Aavishkaar Micro VC Fund (which was initially set up as a trust under Indian Trust Act and now has a VC form registered as an advisory company with SEBI) include I-banking firm Enam Capital and public sector rural development finance agency NABARD.
Aavishkaar, which started venture capital operations in May 2002, is led by the Singapore-based parent Aavishkaar International which aggregates individual investments for the Indian fund. It supports rural and semi-urban entrepreneurs with funding, management support, professional expertise, and other resources.
According to its investment strategy, it looks to fund initial commercial expansion of a proven business model, technology, or service and not the development of a prototype or idea. It targets 4-6 investments with a size ranging between Rs 10 lakh-Rs 1 crore and has a minimum target Internal Rate of Return (IRR) of 32%.
Aavishkaar International was originally allowed to invest $2 million into Aavishkaar India Micro VC Fund in 2002 as equity capital. It had then brought in $1.07 million (Rs 4.28 crore). Later the VC fund was allowed to infuse additional funds from three foreign investors– CORDAID ($1.5 million), Care Enterprise Partners ($0.5 million) and Lesing Nominees ($0.5 million) besides domestic institutional investors (NABARD and Enam Capital) and few domestic retail investors in December 2007.
The fund is estimated to have invested more than Rs 5.55 crore in 13 companies engaged in the areas of renewable energy, dairy, healthcare, ICT, agri-implements besides other small and medium sectors.
According to Rai, “Aavishkaar has multiple funds. In Aavishkaar India, we have 13 companies and we are making two more investments soon.”
Some of its existing portfolio companies include Servals Automation(Chennai-based rural technology firm which sells an efficient kerosene burner and micro-irrigation device), Shri Kamadhenu Electronics(involved in technologies for dairy co-operatives), Tide Technocrats(Bangalore-based rural energy solutions firm), Craftsbridge(Pune-based handicrafts firm) among others.