Mumbai-based impact investor Aavishkaar Group has raised USD 37 million from Dutch development finance institution FMO.
“We are in the third phase of our consolidation, where we have invited FMO to join as a shareholder in the group, right at the top. This will be a minority stake - about 10%,” Vineet Rai, chief executive of Aavishkaar Group, told Economic Times.
The fresh capital will be used to lay the groundwork to expand its operations in Africa and Southeast Asia.
“FMO has a very deep network in both regions, and we expect them to play a very clear strategic role in the impact investing space. We are targeting the next 7-8 years to grow our assets under management from USD 1 billion today, to USD 7 billion, or Rs 50,000 crore,” Rai said.
Existing investors of the Aavishkaar Bharat Fund include UK government’s CDC Group, Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD, among others.
Founded in 2001, Aavishkaar Group serves the low_income market segment by creating scalable enterprises. Under its equity investment arm, Aavishkaar Capital, the Group has launched six funds, across India, Africa and Southeast Asia.
“With this investment into the group, we hope to help the Aavishkaar Group reduce the vulnerability of India’s, Southeast Asia’s and Africa’s low-income population… We will work with Aavishkaar to help them build their own institution so that they can focus on what they do well: building companies, backing entrepreneurs and unlocking innovative ideas,” FMO said in a statement.
As much as 65% of Aavishkaar’s total AUM is in India. The fund invests in a range of sectors, namely agriculture, dairy, education, energy, handicrafts, health, water and sanitation, technology for development, microfinance and financial inclusion.