Ankur Capital makes three investments in India

ImageImpact investment fund, Ankur Capital, has invested in three early-stage ventures that focus on rural markets.The Mumbai-based venture capital fund, which received approval from market regulator Sebi earlier this month, is backing CropIn, a cloud-based farm management systems company, home compost solutions provider Daily Dump and primary eye-care service provider ERC.The startups have issued convertible debt to the fund, which will invest about Rs 50 lakh [about US$82,500] in each company for about a 30 per cent stake.”We will also look to make debt-linked investments,” said Rema Subramanian, co-founder and managing partner of Ankur Capital, which has a corpus of Rs 40 crore [about US$6.6 million].”Some early-stage startups, such as producer companies require debt more than equity and we want to issue innovative instruments to widen our investment mandate,” she said.

Ankur Capital’s first fund will look to make 20 investments, with an average investment period of five years. For follow-on rounds of funding, the fund will invest between Rs 2 crore [about US$330,000] and Rs 4 crore [about US$660,000] in each investee company while aiming for gross return on investments of about 15 per cent.

“We are looking at muted returns, but our primary focus will be on the handholding and governance that we can bring to these companies,” said Subramanian.

Several local currency funds have been set up in the Indian impact investing space that is largely dominated by foreign institutional capital with funds such as Omidyar Network and the Michael and Susan Dell Foundation.

“Rupee capital has started to flow in, which has been a great development in the country, and largely because of the shift in mindset from the NGO model to a more efficient and competitive marketplace model, “said Srikrishna Ramamoorthy, partner Unitus Seed Fund.

Last year social venture investments doubled in India with 80 transactions totalling $390 million (Rs 2,418.8 crore).

Global impact investment firm, Unitus Seed Fund announced its Rs 75 crore, local currency fund – USF India – in January last year, while Krishnamurthy Vijayan, the former chairman of JP Morgan Asset Management India launched his Rs 250 crore Charioteer Fund – I in September.

“Investor interest is being driven, not necessarily by just good exits, but by the emergence of ventures that have a sustainable business model,” said Ankur’s Subramanian.

Editor’s Note:  The article above was written and published by the Economic Times in India on February 26, 2014.

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