Impact investing-focused Aavishkaar-Intellecap Group plans to raise as much as $75 million in the next few months to fund growth of its various businesses and to invest in new ones.
“We are thinking of going to the market to raise $50-75 million for our holding company, sometime in the middle of the year. This capital would allow the group to support our subsidiary companies as they look to scale and to seed some new business,” said Vineet Rai, founder of Aavishkaar-Intellecap Group.
The group operates its equity funds business through Aavishkaar Venture Management Services; investment banking, consulting and research through Intellecap; extending working capital and business loans to small and medium enterprises through Intellecash, venture debt through Intellecap and microfinance lending through Arohan.
In January 2017, the group raised $25 million in equity funding from Triodos Investment Management, the investment arm of Europe’s Triodos Bank, and Shell Foundation, an independent charity established by the Shell Group. Triodos invested $15 million in the group, while Shell contributed $10 million.
The capital to be raised this year will be used to fund businesses such as IntelleGrow, a lender to small businesses, and Tribe, an early-stage fintech company within the group, to maintain the group’s stakes in these businesses. Both IntelleGrow and Tribe will approach investors for funds later this year, said Rai.
The group is currently raising a $200 million India dedicated fund and has started formal talks to raise its first Africa fund, its seventh till date.
“Our next fund will be an Asia (excluding India) fund. Our commitment to the funds ranges from 1-2% to up to 5%. As we raise larger funds going ahead, we will need more capital to commit to the funds,” said Rai. Tribe, the fintech platform that connects lenders to small entrepreneurs needing loans in the range of Rs1-10 lakh, is currently in talks with high networth individuals to raise around $2 million, its first external capital raising.
“In Tribe, we are currently closing a $2 million friends and family round. The group has put in $2 million till now to incubate the business. We wanted to validate the business model and bring in some long-term partners within the company and hence the small round of external capital,” said Rai. He added that Tribe will approach venture capital funds in the second half of the year as it chases exponential growth.
Tribe uses technology to take decisions on lending to individual entrepreneurs in the MSME space such as small distributors of packaged consumer goods, tailors, pharmacy and store owners. Tribe does not lend from its own balance sheet and is a platform that connects lenders such as banks and non-banking financial companies to these entrepreneurs.