MICROCAPITAL BRIEF: Aavishkaar India Fund VI Nets $130m for MSMEs Addressing Climate Change, Agtech, Fintech - Anchored by Public Funding from Domestic, European Sources

Aavishkaar Capital, a subsidiary of India’s Aavishkaar Group, recently completed the first close of its Aavishkaar India Fund VI with commitments totaling INR 10 billion (USD 130 million) to invest mainly in micro-, small and medium-sized enterprises (MSMEs). In particular, Sushma Kaushik, a partner at Aavishkaar Capital, said that the fund aims to capitalize on “tech-led businesses [that] are able to disrupt in traditional sectors like agriculture, financial services and essential services,” including by helping firms mitigate and adapt to climate change. The firm plans to continue to raise capital for the fund so it can invest sums of USD 10 million to USD 25 million each in approximately 14 companies.

Of the funding raised, 30 percent is earmarked “to support projects that empower women as entrepreneurs, business leaders, employees and consumers,” in line with the 2X Challenge initiated by development finance institutions of the Group of Seven (G7) high-income countries.

The anchor investors in the Aavishkaar India Fund VI are British International Investment (BII), a development finance institution of the UK government formerly known as CDC Group; Funds for Startups, which is managed by the government-backed Small Industries Development Bank of India; Self Reliant India (SRI) Fund, which is sponsored by the Indian government’s National Small Industries Corporation and managed by a subsidiary of the government-backed State Bank of India; and the government of Switzerland’s Swiss Investment Fund for Emerging Markets. Various Indian investors, such as Axis Bank, Max Life and unspecified individual investors, also participated in the close.

Aavishkaar India Fund VI is Aavishkaar Capital’s eighth fund. Through these funds, the firm holds 30 investments across 23 countries as of 2022. Aavishkar Group, also as of 2022, has INR 40 billion (USD 520 million) in assets under management. Its other members are the Aavishkaar Foundation, the microfinance institution Arohan, MSME lender Ashv, and the consultancy and event organizer Intellecap. The Aavishkaar Foundation was set up in 2020 to respond to the COVID-19 pandemic.

By Hasnat Aslam, Research Associate

Sources and additional resources

BII press release
https://www.bii.co.uk/en/news-insight/news/were-anchoring-a-new-impact-fund-from-aavishkar-capital/

Economic Times article
https://economictimes.indiatimes.com/tech/funding/aavishkaar-capital-impact-investing-arm-of-the-aavishkaar-group-raises-rs-1000-crore/articleshow/90671828.cms

Aavishkaar Capital homepage
https://aavishkaarcapital.in/

Aavishkaar Group homepage
https://aavishkaargroup.com/

Aavishkaar Group impact report
https://aavishkaargroup.com/pdf_download.html

BII homepage
https://www.bii.co.uk/

Small Industries Development Bank of India profile on Funds for Startups
https://www.sidbivcf.in/en/funds/ffs

SBICAP Ventures profile on SRI Fund
https://sbicapventures.com/self-reliant-india-sri-fund/

Swiss Investment Fund for Emerging Markets homepage
https://sifem.ch/

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.