Aavishkaar makes final close of second venture fund at $94M

Aavishkaar Venture Management, a venture capital firm focused on India’s rural areas and bottom-of-the-pyramid (BoP) space, has made the final close of its second venture capital fund Aavishkaar India II Company Ltd at $94 million. The venture fund, aiming to invest in underserved India, got lead investments coming from Kfw (the German Development Bank), Impact Investment Trust and other institutional investors.

VCCircle first wrote about the final close of the fund in May this year.

Aavishkaar India II’s predecessor raised $14 million in January 2009 and the larger second fund will ensure that the firm will be able to write bigger cheques and invest across various stages of its portfolio companies.

Aavishkaar II reached its first close in September 2011 with commitments from International Finance Corporation (which anchored the first close), as well as CDC, Kfw and FMO, among the development finance institutions, besides the networking major Cisco.

A second close came in December 2012 with Rianta Capital and FMO making further commitments. High net worth individuals also invested in Aavishkaar II through Impact Investment Trust.

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. The fund will make a total of around 25 investments.

With the close of this fund, the total corpus of Aavishkaar Venture Management Services will be around $160 million.

“Impact investing is nascent and at Kfw, our approach to develop the market is to partner with a fund with the most evolved strategy and a credible track record in identifying the most promising entrepreneurs with a truly impact-driven mission,” said Barbara Schnell, division chief at Kfw.

“By backing this fund, IFC will support small and medium enterprises with innovative business models in rural and underserved markets and boost the flow of capital in India’s low-income states. We hope that our involvement helps build confidence among institutional investors to invest in scalable businesses in health, water and sanitation, education, agriculture and renewable energy,” said Serge Devieux, IFC director for South Asia.

(Edited by Sanghamitra Mandal)