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.