Impact platform Aavishkaar Group is looking to raise $150 million in fresh funding as it gears up to expand its operations in Indonesia and tap new markets such as Vietnam and the Philippines.
The firm, which manages assets worth more than $1 billion, will divest a 25 per cent stake at the group level to raise the capital, its chairman Vineet Rai told DealStreetAsia.
Aavishkaar is in talks with a slew of sovereign and pension funds, besides investors in Singapore and Japan, as it looks to kickstart its digital micro-banking business in Southeast Asian countries.
“The group would soon be inviting new shareholders to participate at the platform level for a minority stake. A significant amount of this capital would be invested in Southeast Asia to promote our expansion in the region,” said Rai.
So far, its presence in Indonesia is restricted to impact investments made by its subsidiary Aavishkar Capital, which runs a slew of venture capital funds. The firm entered the country in 2015.
The proposed fundraising process will be at the primary level. The founders currently own 51 per cent of the firm, while the remaining 49 per cent is held by shareholders including Nuveen, the investment subsidiary of US-based asset manager Teachers Insurance and Annuity Association (TIAA); Dutch impact investor FMO; Triodos Investments, a multi-billion dollar fund; and Shell Foundation.
“I believe after India, Southeast Asia may be a significant bastion for impact investing as ground conditions are ripe,” said Rai. “Over the last seven years, we have learnt a lot while making investments in Indonesia… We have been exploring strengthening our presence in Indonesia while also exploring Vietnam, the Philippines and the Mekong [region, which includes Vietnam, Myanmar, Thailand and Cambodia] for locating ourselves firmly in Southeast Asia.”
Besides Aavishkar Capital, the group’s other companies are Arohan, a digital microfinance firm that claims to be eastern India’s largest non-banking financial institution, and SME-focused debt finance provider IntelleGrow.
Aavishkar Capital’s portfolio companies in Indonesia include online furniture retailer Fabelio and plantation company Sei Balai. The venture arm is looking to raise $150 million for a Southeast Asia-focused fund, we have previously reported.
The fund manager’s parent company plans to invest at least $30 million in the Southeast Asia region as it seeks to enter the digital insurance and ‘phygital’ MSME lending business by 2021, said Rai.
“As plans shape up, the idea is to create another subsidiary within the group that is separate from our investing entity in Indonesia,” said Rai.
The group’s flagship company Aavishkaar Capital was established in India in 2001. Today it operates six funds across India, Africa and Southeast Asia with assets under management (AUM) of $450 million.
The firm claims to have made more than 67 investments, including 36 full and partial exits, and impacted as many as 110 million people across Asia and Africa by helping create 400,000 jobs and livelihoods.
“We want to be a serious global platform in the space of impact [investing] and to achieve that, we have plans to reach a $5 billion AUM by 2025 and $12 billion AUM by 2030,” said Rai.
Aavishkaar invests in sectors such as agriculture, financial inclusion and essential services, which includes circular economy, logistics, and healthcare.
Apart from India and Southeast Asia, Aavishkar Capital has a significant presence in Africa. It also has investments in Bangladesh and Sri Lanka. In these markets, it invests through Aavishkaar Frontier Fund, which has a corpus of $48 million.