Impact investor Aavishkaar to raise ₹2,200 crore fund, focused on South Asia

Mumbai-based impact investor Aaavishkaar Group is looking to raise ₹2,200 crore ($300 million) for its new fund, to invest in South Asian countries, as reported by LiveMint.

With the latest fund, the firm will be making investments across financial services, agriculture, energy and health sectors. The firm will target South Asian countries like Vietnam, Indonesia, Myanmar and Laos, among others, while avoiding India and China.

Vineet Rai, Managing Partner and CEO, Aavishkaar Venture Management Services, said, “We are avoiding India and China, and looking more at smaller markets which have unutilised potential. I see Indonesia as the next hub of impact investing. Like India, it has a high density of population and business models are very scalable. It also has a cultural connect and similarities with an evolving private equity/venture capital system.”

For its eighth fund, the firm will be raising capital from sovereign investors in Singapore, Japan, Australia and the UK, in addition to Asian development finance institutions. The fund is expected to mark its first close by the end of next year.

The latest South Asian fund will add muscle to its $75 million Frontier Fund, supporting startups in South and Southeast Asian markets.

Founded in 2001, Aavishkaar aims to catalyse development in India’s underserved regions, identifying capable entrepreneurs, providing them with capital, supplementing it with a nurturing environment and helping build sustainable enterprises.

Apart from the latest $300 million South Asian fund, the firm is also raising two other funds, the $200 million India-focused Aavishkaar Bharat fund and a $150 million Africa fund, marking its foray into the African market.

The Bharat Fund is backed by institutional investors like the UK’s development finance institution CDC, Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD) and family offices such as Sunil Munjal of Hero Enterprise.

Aavishkaar expects the Bharat Fund to hit its final close by April next year, about the same time when the Africa fund is expected to mark its first close at $60-80 million.

Some of the firm’s investments in India include Pune-based agritech startup AgroStar, Odisha-based Milk Mantra, luxury lifestyle brand Mela Artisans, and logistics startup GoBOLT, among others.

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