Aavishkaar Capital has raised more than 1,000 crore ($130 million) for the first close of its latest impact investing fund, which is the firm’s sixth India-focused fund and eighth overall.
British International Investment (previously CDC Group Plc), Swiss Investment Fund for Emerging Markets, Fund of Funds for Startups Managed by Small Industries Development Bank of India, and Self Reliant India Fund led investments in Aavishkaar India Fund VI, the group’s largest fund to date. The fund will primarily invest in medium and small enterprises that use technology as a key enabler in sustainable agritech, financial inclusion, and vital services, with a particular focus on climate tech, in order to create economically appealing and beneficial firms.
According to Tarun Mehta, partner at Aavishkaar Capital, the firm is aiming for a final closing of $200 million by the end of the year.
“We are seeing a lot of domestic interest for impact investments, and 50% of the fundraise is from domestic investors,” he said.
In addition to development finance institutions, Aavishkaar has raised capital from family offices, high net worth individuals and institutional investors. “We will write larger cheques in this fund. The last fund made nine investments, and in this one, we are planning to make 13-14 investments. We will primarily invest in series A rounds and opportunistically in later stages, and we will either lead or co-lead the rounds,” Mehta added.
According to Anurag Agrawal, partner at Aavishkaar Capital, having a larger amount of capital in the fund will help the firm provide companies with a better sense of visibility of future capital flows.
“It makes sense to give these companies a sense of visibility of future capital. So, we will be reserving sufficient amounts of capital for later rounds as well. Also, the amount of capital going into companies even in early-stage has increased significantly,” Agrawal said.
The Aavishkaar India Fund VI is the first 2X approved flagship fund in the country. The fund has pledged to devote 30% of its capital to projects that empower women as entrepreneurs, business leaders, employees, and consumers, as part of a G7 initiative to deploy resources to support initiatives that empower women as entrepreneurs, business leaders, workers, and consumers.
