Dutch bank FMO mulls $42m investment in impact investor Aavishkaar

Vineet Rai, chief executive of Aavishkaar Venture Management Services. Photo: Mint

Dutch development bank FMO has proposed to invest $42 million in Aavishkaar Venture Management Services, India’s biggest impact investor by size of investments, according to a disclosure.

The proceeds of the funding will be used to provide capital buffer needed to grow the loan books of the underlying non-bank financial institutions of Aavishkaar, FMO said in its investment proposal.

Aavishkaar is a holding company and an asset manager that provides microfinance, SME lending, fintech, fund management, advisory, and consultancy. It is expanding its business activities into South East Asia and Africa.

“Aavishkaar provides both access to finance for underbanked individuals and businesses mainly in India and facilitates investment or directly invests into inclusion focused companies through equity funds,” FMO said.

Founded in 2002, Aavishkaar has made more than 58 equity investments across sectors and geographies including South Asia, and has raised six funds delivering commercial returns with close to $300 million assets under management.

It is currently raising capital for two of its funds – the $200 million Aavishkaar Bharat fund, an India-specific fund, and a $150 million Africa fund.

In November 2017, Aavishkaar raised $95 million in the first close of its $200 million Aavishkaar Bharat Fund, the firm’s sixth fund. It announced an investment of about $5.4 million in Kottaram Agro Foods, a Bangalore-based packaged foods startup that markets its products under the brand ‘Soulfull’ in March 2018.

It also invested $6.5 million as part of the Series-B round of funding raised by Nepra Resource Management Pvt Ltd.

Aavishkaar follows a consistent investment strategy in all the markets it invests in, where about 35% of the fund will be invested in financial services, 30% in agriculture and 30% in energy and health.

FMO said its proposed $42 million investment “provides capital to support Aavishkaar’s next growth stage”.

The Dutch lender has been actively investing in India’s financial sector. In July, it proposed to invest Rs1.2 billion ($18.2 million) in Indian financial services firm Aye Finance to support the expansion of its loan portfolio in the country.

The proposed investment, which will be in the form of a loan, is fully dedicated to supporting Aye’s financing to microentrepreneurs in manufacturing and service clusters in India.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.