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3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
3. plenary aavishkaar ii mr.vineet
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3. plenary aavishkaar ii mr.vineet

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  • 1. Aavishkaar IIBUILDING BHARAT SUSTAINABLY 1
  • 2.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 2 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 3. What we set out to do : Aavishkaar,2001 Identify entrepreneurial initiatives targeting low income socio-economic groups in Rural India Educate entrepreneurs about venture capital and provide initial risk capital Unleash entrepreneurial energy focussed on bottom quartile to create sustainable and scalable businesses by providing support in operations , strategy and networking Demonstrate potential for venture capital investment in rural and BOP markets . Generate social and commercial returns 3 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 4.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 4 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 5. What we have done: Our Strategy & Execution Plan• Pioneered Early Stage Venture Capital Investing in Rural India – Set up two early stage venture funds focused on rural India to invest in enterprises- which procure, serve or sell products/services or create employment / equity ownership in rural communities – Invited LPs willing to provide patient investment that could create near-commercial returns over a longer period of time with strong developmental outcomes• Incubated Businesses with High Growth Potential – Developed an on ground team to identify entrepreneurs serving these markets – Picked up exciting enterprises and backed them with capital, intensive engagement and networking support• Focus on West and South India – Economic activity and infrastructure was conducive for 5 entrepreneurs © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 6. What we have done: Funds launched  Investment in companies addressing market failures in Rural India  Sectors : Healthcare, Education, Dairy, Technology, First Fund Agriculture, Handicrafts Aavishkaar – I  Current status  Fully committed US$ 14.3 million  No. of Portfolio Companies  23 First Closing ; 2007  Attracted 9 follow on investment rounds Final Closing :2009  2 exits at a discount  2 partial exits at IRR of 43% and 65%  3 write offs  Investment to build financial infrastructure in Microfinance Second Fund spaceAavishkaar Goodwell –  Investments in marquee MFIs in India I  Current status  Fully deployed US$ 18.3 million  No. of Portfolio Companies  7 First Closing 2007 Final Closing 2008  1 partial exit at an IRR of 168%  Attracted 8 follow on investment rounds 6 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 7. What we have done: Portfolio Buildout WAVE ONE (FY’2002-06) CHARACTERISTICS • Entrepreneurs: Local focus, honest and ethical Servals • Stage: Very early stage / high risk ventures • Capital needs: Low SKEPL • Scalability: Modest • Exit: Unforeseeable exit at time of investment Tide Technocrats QUESTIONS FROM ENTREPRENEURS Craftsbridge • What is Equity? • What do I have to give in return? Net Systems • Do I have to pay dividend? • What rate of interest does Aavishkaar charge ? Naveen gram OUR EFFORTS • Handholding / Mentoring: Extensive engagementNumber of Investments Made : 6  Making companies investment readyTotal Invested Capital: INR 18.5 Mn  Putting systems and processes in place  Developing business plans  Strategic and operational support Our first few portfolio companies required extensive support post investment 7 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 8. What we have done: Portfolio Buildout WAVE TWO (FY’2007-08) CHARACTERISTICS • Entrepreneurs: Very focused; with Vision clarity Vaatsalya • Stage: Early stage / Moderate risk ventures • Capital needs: Moderate Vortex Engineering • Scalability: High CK Technologies • Exit: Strong potential exit opportunities DAH Delhi QUESTIONS FROM ENTREPRENEURS • How much equity / dilution? DAH Jaipur • What will the company gain due to equity DAH Bhuj infusion? • How will Aavishkaar help in improving our Rangsutra business? OUR EFFORTSNumber of Investments Made : 7 • Handholding / Mentoring: High engagement  Scale up supportTotal Invested Capital: INR 111.3  Fund raising supportMM  Strategic adviceOur next wave of investments were in business models which were more proven and profitable 8 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 9. What we have done: Portfolio Buildout CHARACTERISTICS WAVE THREE (FY’2010-11) • Entrepreneurs: Sophisticated and articulate Waterlife India • Stage: Early stage / Proven business models • Capital needs: Significant Saraplast • Scalability: Rapid B2R • Exit: Strong potential exit opportunities Swas Healthcare QUESTIONS FROM ENTREPRENEURS Zameen • What valuation and which instruments? • Tranches and Investment Structuring Butterfly Fields • Benefits of Aavishkaar’s partnership G V Meditech • Board participation and key rights INI Farms Milk Mantra OUR EFFORTS • Handholding / Mentoring: Moderate engagement M-health  Strategy and long term vision formulation  Networking supportNumber of Investments Made : 10  Fund raising supportTotal Invested Capital: INR 232.7MM Our most recent investments have been in highly scalable enterprises led by very professional management teams 9 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 10. What we have done : Refined Our Investment PhilosophyLearnings from our experience between 2002-08, has helped toconsiderably refine our investment philosophy Greater focus on scalable businessesDealing with fewer “unknowns” -Investments with defined investment-demonstration-progress linkage -Clarity on capital needs - To demonstrate viability of idea - For further growthAbility of entrepreneurs to scale and build the businessInvestees would in turn, need more support in capital planning, fundraising and organisation buildingOn account of the above, these companies needed more capital to support theirgrowth and scale as reflected by the higher ticket sizes of our investments 10 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 11. What we have done: Development Impact of Portfolio Companies Our Portfolio companies outreach totals over 2.6 million disadvantaged people Over 60% of the Aggregate investee outreach economic value comprises benefit of over women US$40 during 2010-2011For every rupee Carboninvested our Emissionportfolio companies Reductionhave generated an 84,295MTeconomic valuebenefit of 22x 11 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 12.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 12 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 13. What we learnt: How to tap potential of rural economy OBJECTIVES CHALLENGES• Use investing as a tool to bring • Talking about high risk investments about development sustainably to in meltdown times of 2001 Rural India • Explaining „equity‟ to entrepreneurs• Demonstrate effectiveness of • Learning investing by doing it venture capital model toward early • Seeking the manner of „EXIT‟ stage investing in Rural Economy LEARNING • We were right in our hypothesis “ Rural India has opportunities galore” • We were early in our estimation “ Rural India is ready for equity” • Our lack of understanding of challenges was adequately supported by the right amount of over confidence 13 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 14.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 14 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 15. What has changed The market has evolved – Quality professional manpower getting interested in the rural economy – Changing landscape in the rural and underserved market with heavy public investment in infrastructure – Growing levels of income and awareness creating need and demand for quality products and services Investor interest has taken off; Mainstream and social funds have emerged on the horizon – Rural India has emerged as a big market in the last decade with all major corporations vying for a share – Mainstream and Social Venture Funds willing to support enterprises serving these markets, reinforcing our belief The underserved/poorer parts of India have seen improved governance and experienced exceptional growth – States like Bihar, Rajasthan, MP, UP have started experiencing investment activity in sectors such as renewable energy, agriculture and microfinance – Investors interest at these states as untapped market for basic products/services Venture Management Services- Confidential and Proprietary Information 15 © 2010 Aavishkaar
  • 16. What has changed: Underserved states as newopportunities Aavishkaar believes that Rural India and changing development dynamics offer new opportunities that are largely untapped 16 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 17. What has changed: Demand Growth • Cumulative government spend in No. of Households –’000)Rural Employment various rural areas to double in threeGuarantee Scheme years from the current USD 27Bn • Efficacy of this spend will improve due to the UID programme • Yield growth acceleration & rise in prices of soft commodities have Rising Farm ushered in buoyancy in incomes No. of Households –’000) Income • Tractor sales, for example, have grown at 10% annually in the past 5 years versus 3.4% annually in the previous ten • Rural Monthly Per Capita Consumption Expenditure growth has overtaken urban rate Consumption • Consuming HHS in rural India 2X in urban Growth India • Stark differences between urban-rural consumer spending pattern, different Source: NCAER, IIFL business models needed to address rural Rural population offers a potentially huge market opportunity but requires needs goods/services which match their needs 17 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 18. What has changed: Investor interest in BOP marketMajor funds‟ interest in rural India is on the rise, but prefer larger ticket sizesCompany Sector Investor AmountSuminter Organics Agriculture Nexus Ventures, Capricorn USD 6.2 mnDlight Design Renewable Nexus Ventures, DFJ, Acumen USD 5.5 mn Energy Fund, Omidyar Network, GGVIL&FS Education Education India Equity Partners USD 37 mnand Technology ServicesServicesVasan Eye Care Healthcare Sequoia India USD 22 mn These funds do not have pipeline access in this space and are not designed to invest in early stage Long track record, local presence, high visibility and deep insights in the emerging pipeline in the market provide Aavishkaar an unique advantage over both established and emerging funds in the space 18 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 19.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 19 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 20. What will we do next: Aavishkaar Strategy - Sow-Tend- Reap T0 - T0+2 yrs T0+2yrs - T0+4 yrs T0+4 yrs – T0+6 yrs SOW TEND REAP• No of companies: ~ 15 • No of companies: ~15 • No. of companies: ~5• Investment Size $0.5- $2 Mn • 7-8 SOW stage companies • Investment Size: $3–$5 Mn • Investment Size: $6-8 Mn• 15-25% of the capital • 30-40% of the capital • 20-30% of the capital Screening Factors Screening Factors Screening Factors• Experienced Entrepreneurs • High growth stage • Graduated from SOW and• Innovative Business models • Exit opportunities TEND stages • Rapid growth and visible exit Aavishkaar Inputs Aavishkaar Inputs Aavishkaar Inputs• Mentoring • Managing growth• Advisory and execution • Strategic guidance complexities support • Branding and visibility • Preparing for IPO /• Network extension Acquisition 20 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 21. What will we do next: Opportunities and Strategies CHARACTERISTICS Start Ups •First generation / Serial entrepreneurs •Domain knowledge and sector expertise •Prior management experience in similar businessesSTRATEGY: FOCUS ON SCALABLE BUSINESSES 300 MM IN 3 YEARS? INNOVATIVE BUSINESS MODELS, KNOWLEDGE EDGESTRATEGY: TAKE LARGE POSITIONS INVEST EARLY FOR SIGNIFICANT STAKE: ~20% - 40%STRATEGY: EXTENSIVE MENTORING. A LITTLE MONEY, A LOT OF TIME IN THE EARLY STAGES 21 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 22. What will we do next: Opportunities and Strategies CHARACTERISTICS Existing •Existing companies already in the market Businesses •Technology, cost and supply scalability of products/services validated •Market acceptance and reach established at a local/regional levelSTRATEGY: TEAM, TEAM, TEAM!!! BUILD STRONG MANAGEMENTSTRATEGY: OPERATIONS AND SYSTEMS INCORPORATE BEST BUSINESS PRACTICES, CORP. GOVSTRATEGY: TAKE TO NEXT LEVEL STRATEGY GUIDANCE, CREATING VISIBILITY, BUILDING BRAND 22 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 23. What will we do next: Learning from our past investments CASE STUDY: VAATSALYA HEALTHCARE We will invest large amounts into 500 our successful companies at 500 reduced risk Funds Raised (INR Mn) 200 Funds Raised (INR Mn) 200 7.1 60 7.1 60 Series A Series B Series C Series D* Series A Series B Series C Series D* Aavishkaar 2006 2008 2009 2011 Aavishkaar 2006 2008 2009 2011 Investment 7.1mn 20mn 0 0 Investment 7.1mn 40mn 100mn 0 Stake 27% 25% 14% 10% Stake 27% 45% 40% 28% AAVISHKAAR - I AAVISHKAAR - II• We invested early, took higher risk • We will invest early, take higher risk but put more money• The upsides were taken away by Series B/C investors who in subsequent rounds to avoid dilution, and get rewarded invested in a relatively de-risked business model for our early stage investing STRATEGY: BACK THE WINNERS FURTHER INVEST IN STAR PERFORMERS, READY THEM FOR MERGER/ACQUISITION OR IPO 2Current 23 value: As of Mar’14 * Fund raising in progress © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 24. Recognition: Our EntrepreneursEmpowerment through Ownership 24 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 25. Recognition: Awards and AccoladesG20 SME Finance Challenge, November 2010L-RAMP Fostering Award forExcellence, December 2007UNDP World Business Award, May 2006 25 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 26. Recognition: News Coverage 26 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 27.  What we set out to do What we have done What we learnt What has changed What we will do next Aavishkaar - II 27 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 28. Aavishkaar II: Snapshot “Delivering commercial returns to investors by investing in scalable enterprisesFocus in underserved markets of India with strong development outcomes” Size & term Size: $ 120 million (Foreign fund);Investing Strategy Sow Tend Reap Exit Routes Combination of third party sale, acquisition and IPOManagement 2 per cent during investment period and 2 per cent of invested capital Fee after investment period Term 10 years (1 + 1 year extension) Target IRR 20 per cent (net of fees) Hurdle Rate 8 per cent Carried 20 per cent Interest Pre-op Lesser of $750,000 or 1% of the fund size Expenses 28 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 29. Aavishkaar II: Snapshot • Aavishkaar II achieved its First Close on Sep 30, 2011 with a Total Commitment of USD 64.7 million • During December 2011, KFW provided additional commitment of USD 6.5 million. Total effective commitment currently stands at USD 70.3 million. (USD million) Total Commitment Addl. Top-up Aggregate Effective Investor at First Close Commitment Commitment Commitment CommentsI CDC 25 25 25 Effective CommitmentII IFC 15 15 14.1 capped at 20% of the Aggregate CommitmentIII CISCO 10 10 10IV FMO 7.5 7.5 7.5V KFW 7.2 6.5 13.7 13.7 Total 64.7 6.5 71.2 70.3 • Final Close expected be achieved by March 2013 29 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 30. Aavishkaar II: SnapshotExpected Sector-wise Investment split Total Invested Strategies No. of Deals (USD M)I Health Water and Sanitation 6 27II Education 5 19III Agriculture 6 25IV Renewable Energy 4 18V Other Emerging Sectors 2 9 Total 23 98 30 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 31. Aavishkaar II : Six investments made till date Vortex Engineering Karadi path Milk Mantra • Design, manufacture of • A non‐linear English • Farm to table dairy company Low‐cost ATMs capable of teaching methodology based in Low Income State of operating in remote rural/ suitable for large number of Odisha semi‐urban regions at fraction government and affordable of cost of conventional ATMs private schools • Tend Stage Investment • Tend Stage Investment •Sow Stage Investment • Commitment - $ 1.8 Mn • Commitment - $ 2.4 Mn • Commitment - $ 1.5 Mn Vana Vidyut EPS mHealth • Biomass‐based power • Manages and deploys • Provides medical advice generation using owned / ATMs on behalf of banks, by phone for rural mass leased energy plantations thus enabling branchless markets. as the source of feedstock banking in urban and rural India • Sow Stage Investment • Sow Stage Investment • Sow Stage Investment • Commitment - $ 0.7 Mn • Commitment - $ 3.3 Mn • Commitment - $ 1.9 Mn © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information 31
  • 32. Aavishkaar II: Our edge in impact investing • High quality portfolio comprising companies that are innovatively and sustainably targeting fundamental market needs, inefficiencies and defining the sector. Most of our companies are considered as pipeline for strategic acquisitions and major venture funds • A proprietary pipeline of start-ups scouted through our long -term partnership with incubators and on-ground presence of 10 years • A collaborative approach with active need–based hand holding on diverse dimensions including fund raising, strategic advice, networking, early-stage support • Our investments have been catalytic in triggering subsequent funding rounds • We are recognized as a sector builder and have facilitated prominent events such as Sankalp and Srijan in the bottom-of-the-pyramid and microfinance space • Early stage nature of investing in a space with limited competition allows us to get in at low valuation 32 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 33. Aavishkaar II: Key PrincipalsVineet Rai  Vineet is founder and Managing Director of AVMS with over 17 years of experience in leading innovative interventions in the development sector.Managing Director And  He has experience in small business incubation, SME sector, microfinance and ventureFounding Partner capital investments.  He is CEO and co-founder of Aavishkaar India Micro Venture Capital Fund and the Co- founder and Director of Intellecap.  He is an Ashoka Fellow and holds a Post-Graduate diploma in Forestry Management from Indian Institute of Forest Management, Bhopal. Pradeep has been associated with Aavishkaar since its inception in early 2002 and bringsP Pradeep  with him over 16 years of operational and investment experience in sectors includingDirector farming and allied activities, agro processing, renewable energy, manure and fertilizers,And Partner healthcare services and delivery, micro-finance and financial services delivery.  Pradeep has been closely involved across all stages of the deal spectrum for all investee companies, both pre and post investment, and also is a board representative on some companies  Earlier, he worked for an integrated sugar complex engaged in the production of sugar, molasses, alcohol, manure and cogeneration of power, where he had been closely involved in the financial structuring for new domestic projects, valuation and takeover procedures of co-operative sugar factories as well and in discussions with overseas venture capitalists for sugar projects in the ASEAN region  Pradeep holds a MBA with specialization in finance and is a Bachelor in Applied Sciences (Engg.). 33 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 34. Aavishkaar II: Company structure 34 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information
  • 35. Contact us Vineet Rai Email: vineet_rai@aavishkaar.org Mobile: +91 98206 45736 P Pradeep Email: p_pradeep@aavishkaar.org Mobile: +91 98403 95004 Investment Advisor Aavishkaar Venture Management Services 516, Palm Spring l Link Road l Malad (W) Mumbai, India Tel: +91 22 4200 5757 35 © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

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