SEAF India’s $150m second fund might have strong presence of Asian investors

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SEAF India Investment Advisors (SIIA) is in the process of raising $150 million for its second fund, and investors from Japan, Singapore, China and the United States are interested.

SIIA began marketing of its SEAF India Agribusiness International Fund II in September, as reported by DEALSTREETASIA. It will invest — like the first fund — in back-end agribusinesses like food supply where valuations are more reasonable, to front-end businesses like restaurants, said Hemendra Mathur, managing director, SIIA.

Existing investors of Fund I, which is 85 per cent deployed, are also considering investing in Fund II. Such investors include the Omidyar Network, Midland Capital, Sarona Asset Management, and Indian majors like Life Insurance Corporation of India, Small Industries Development Bank of India (SIDBI), and National Bank for Agriculture and Rural Development (NABARD).

The fund will be sponsored by Washington-based Small Enterprise Assistance Funds (SEAF), which has invested $180 million in small and medium businesses around the world. Mathur expects international investors to put in $100 million, and the rest to come from Indian investors. SIIA has been receiving inquiries from investors from countries like Singapore, China, U.S. and Japan, who were not part of the earlier fund, according to Private Equity International.

Mathur said that the traditionally fragmented agribusiness sector is witnessing moves towards consolidation. “India currently lacks integration from the back end to the front end. Integrating forward is relatively easier than backward. I do expect that some of the online grocery chains would soon integrate backwards towards the source,” he said in a chat with DEALSTREETASIA.

Food demand in India is growing by 7-8 per cent, with rising levels of income and continued growth. Food delivery companies such as BigBasket are making it easier for consumers to receive deliveries of food items straight to their homes.

The food and agribusiness market size in India is estimated at $375 billion, out of which food makes up $300 billion. The rest includes agricultural inputs such as seeds and fertilizers, non-edible products such as farming equipment, and crops like cotton and jute.

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