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Social impact investor Aavishkaar to raise $100-150 mn for Africa investments

03 January, 2017

Aavishkaar Venture Management, an investment firm that backs enterprises working in rural areas, will raise between $100 million (Rs 681 crore) and $150 million (Rs 1,022 crore) for investments in Africa, said a report in a business daily. 

A report in the Mint newspaper said, citing Aavishkaar CEO Vineet Rai, that the social impact investment firm will kick off the fund-raising by the middle of 2017 and expects to close it next year.

In 2014, The Economic Times had reported that Aavishkaar was raising $400 million for two funds, the first focussed on India and the second on Africa. However, Rai, in an interaction with VCCircle later clarified that the second fund would be South and Southeast Asia-focussed.

An email query to Aavishkaar didn’t elicit any response till the time of filing this report.

The Africa fund, if raised, will be the second overseas-focussed fund for the impact investor. The firm had launched Aavishkaar Frontier Fund in 2013 that seeks to invest in South and Southeast Asia. The fund, which has a target corpus of $75 million, was aiming to make the final close by December last year.

Aavishkaar Frontier Fund has backed three firms so far, one each in Indonesia, Bangladesh and Sri Lanka. It made its debut investment in US- and Indonesia-based seafood firm North Atlantic Inc earlier this year. Its next two investments were in Sri Lanka-based food processing firm MA’s Foods and Bangladesh-based payment solutions provider CloudWell Ltd.

The firm also floated last year its third India-focused fund, and is looking to raise $250-300 million (Rs 1,680-2,020 crore then) in its third outing.

The company’s second India-focussed fund, Aavishkaar India II Co. Ltd, had raised $94 million. Some of the notable portfolio firms of Aavishkaar include Milk Mantra Dairy, Nalanda Learning Systems, Nepra Resource Management and Ergos Business Solutions.

Founded in 2001, the early-stage equity financing firm claims to have about $200 million under management. It has invested in at least 50 enterprises in India across eight sectors, with 90% companies focussing on rural and semi-urban markets.

According to its annual report released in 2015, microfinance was the main draw across sectors for the firm with 10 investments totalling $31.6 million. It was followed by technology for development where seven investments worth a total $23 million were made.

Aavishkaar has made 13 full and six partial exits. Its portfolio companies raised close to $500 million in follow-on rounds, it said in the annual report.

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Social impact investor Aavishkaar to raise $100-150 mn for Africa investments

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