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Aavishkaar raises $45M to mark first close for $75M South & Southeast Asia fund

Aavishkaar Venture Management, a venture capital firm focused on enterprises engaged in India’s rural areas and bottom-of-the-pyramid (BoP) space, has made first close of its Aavishkaar Frontier Fund at $45 million, as per a company release. The fund has an overall target corpus of $75 million.

Last December, the firm had said it has got commitment for $50 million and was aiming to wrap up Aavishkaar Frontier Fund by March 2015. The fundraising process for this vehicle was launched in 2013.

Aavishkaar said it will invest in 15-18 companies with a ticket size of around $1-5 million each in countries like Indonesia, Bangladesh, Sri Lanka and Pakistan. It will chase investments in affordable healthcare & education, water & sanitation, food & agriculture services, energy, technology for development and livelihoods.

The firm may also extend its presence in these markets beyond an investment with its affiliate Intellecap, a microfinance business advisory firm.

Vineet Rai, CEO of Aavishkaar, said, “The impact investing ecosystem in all these emerging economies is at a nascent stage similar to India a decade ago, when Aavishkaar started its pioneering work investing in rural enterprises in India. This is an important step for Aavishkaar to take its investment and ecosystem building approach beyond India, to its neighbours.”

The Aavishkaar Frontier Fund has raised the money from European development financial institutions KfW, DeG, Proparco, DGGF and FMO.

Commenting on the investment, Nanno Kleiterp, chief executive of Dutch lender FMO that has invested in all the five Aavishkaar Funds, said, “Southeast Asia is a region with great economic potential, waiting to blossom. We want to improve the access to finance and will support the creation of jobs for many people.”

Thomas Klein from DEG’s equity and mezzanine department said, “A lower to lower-middle class of consumers that is expanding both in numbers and affluence has enormous demand for the types of solution that the future investee companies of Aavishkaar will provide.”

Aavishkaar, which invests in sectors like healthcare, water and sanitation, education, agri-business and financial inclusion, has invested in more than 48 enterprises in India over the last decade across eight sectors with 90 per cent of the companies having rural and semi-urban markets as their focus. It has clocked13 full exits and six partial exits from its portfolio firms to date.

It last raised a $95 million fund under Aavishkaar India II in 2013. Its investments range from Rs 3 crore to Rs 50 crore.

With the first close of the regional fund, Aavishkaar's assets under management have moved to $200 million.

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