Venture fund Aavishkaar raises $94 million from KFW and others

Aavishkaar India II Company Ltd, a venture fund focussed towards investing in underserved India achieved its final close at $94 million with lead investments coming from KFW (the German Development Bank), Impact Investment Trust and other institutional investors.

The Venture Capital firm in a press release stated, Aavishkaar II had reached its first closing in September 2011 with commitments from International Finance Corporation (IFC), CDC, KFW and FMO amongst the development finance institutions, and Cisco representing private corporation capital. A second closing was achieved in December 2012 with Rianta Capital and FMO making further commitments.

Commenting on the investment, Barbara Schnell, Division Chief at KFW said “Impact Investing is nascent and at KFW our approach to develop the market was to partner with the fund with the most evolved strategy and a credible track record in identifying the most promising entrepreneurs with a truly impact driven mission. We found that combination in Aavishkaar II.”

Tej Gujadhur and Jayesh Parekh, Board Members of Aavishkaar II said “It is important to align with investors that have a long term horizon. Aavishkaar II’s approach of participating in creation of new businesses in challenging geographies requires a patient approach. We are proud to have investors with the requisite patience and ability to sustain this spirit.”

Commenting on the closure Vineet Rai, Founder and MD, Aavishkaar Venture Management Services said, “We are delighted with the final close and are excited by the opportunity provided by Aavishkaar II to direct more capital to underserved India.

Speaking at the final closing, Hiti Singh, Portfolio Director at CDC, the UK Development Finance Institution said “We backed the Aavishkaar team because they have the experience and ambition to make a positive impact on businesses in those parts of India that haven’t traditionally been well served by the investment community. Rural areas in particular are facing a shortage of capital.”

Since its first closing in 2011, Aavishkaar II has already made seven investments in early‐stage enterprises across agriculture, dairy, education, technology for development and renewable energy sectors.