Aavishkaar II raises US$ 94 million, announces its final close

Aavishkaar India II (Aavishkaar II), a venture fund focussed towards investing in underserved India achieved its final close at US $ 94 Million with lead investments coming from KFW (the German Development Bank), Impact Investment Trust and other institutional investors.

Aavishkaar II had reached its first closing in September 2011 with commitments from International Finance Corporation (IFC), CDC, KFW and FMO amongst the development finance institutions, and Cisco representing private corporation capital. A second closing was achieved in December 2012 with Rianta Capital and FMO making further commitments.Commenting on the investment, Barbara Schnell, Division Chief at KFW said “Impact Investing is nascent and at KFW our approach to develop the market was to partner with the fund with the most evolved strategy and a credible track record in identifying the most promising entrepreneurs with a truly impact driven mission. We found that combination in Aavishkaar II. Our added investment is a reflection of our continued support to the Aavishkaar model of enterprise based development that has the potential to bring about sustainable change.”

High net worth individuals have also invested in Aavishkaar II through the Impact Investment Trust. “We are excited to be participating in Aavishkaar II. There is growing interest among individual investors for investments that have a positive social intent as well as financial returns. We believe that Aavishkaar’s pioneering model, and the experience of the Aavishkaar team, present a unique opportunity in this area,” said an investor who has invested in Aavishkaar II through the Impact Investment Trust.

Speaking at the final closing, Hiti Singh, portfolio director at CDC, the UK Development Finance Institution said “As the largest investor in Aavishkaar II, CDC is particularly pleased to see how the fund has reached its final close by bringing in other investors and commercial capital. We backed the Aavishkaar team because they have the experience and ambition to make a positive impact on businesses in those parts of India that haven’t traditionally been well served by the investment community. Rural areas in particular are facing a shortage of capital. Aavishkaar II provides the right balance of finance and know‐how to early stage businesses to help them grow, supporting small entrepreneurs and delivering jobs and development impact. We’re encouraged by their progress and look forward to them going on to make further investments that make a lasting difference to communities across rural and underserved India.”

Since its first closing in 2011, Aavishkaar II has already made seven investments in early‐stage enterprises across agriculture, dairy, education, technology for development and renewable energy sectors. International Finance Corporation anchored the fund’s first closing.

The fund is advised by Aavishkaar Venture Management Services, which has pioneered the idea of the enterprise‐based development approach globally and advises funds with a total corpus of around US $ 160 million.

Aavishkaar II is a US$ 94 million venture fund that seeks to invest in early and growth‐stage enterprises operating in rural and semi‐urban India. The fund achieved its first closing at US$ 70 million in September 2011 and its final closing at US$ 94 million in June 2013. Aavishkaar II aims to build on the experience and track record of its predecessor, the Aavishkaar I fund and will make equity investments in enterprises offering products and services in areas such as healthcare, water and sanitation, education, renewable energy and agriculture, with a significant proportion of these investments being in ‘Low‐Income’ States.