The Michael and Susan Dell Foundation (MSDF), one the world’s biggest philanthropic organisations, and an active impact investor in India, has earmarked an additional $50 million (about Rs 333 crore) towards investments in the country over the next three years.
The amount, which will be primarily used towards making direct investments in early-stage ventures, will be in addition to the impact investor’s existing vehicles, which includes its Delaware-registered, proprietary seed-stage fund – India Educational Investment Fund.
“A large part of the $50 million will go towards (funding) startups, and this is also because, while we are an extremely active impact investor, we are increasingly finding that the venture capital space is struggling to get money, and ventures in areas of our interest, are even more starved,” Debasish Mitter, country director – India, MSDF told ET.
The Foundation has also backed two early-stage funds in the country as a Limited Partner – Unitus Seed Fund and social business incubator Villgro-launched Menterra Venture Advisors.
“We are not getting enough of the deals that we would like to do. We feel there is a tremendous fit between a venture philanthropist approach to seed funding, and what the space needs…. And what can be better than philanthropist organisations that aren’t shy to put its capital at stake in a venture philanthropic manner,” Mitter said.
According to Mitter, MSDF, which focuses on backing early-stage ventures operating in the education, skills and financial inclusion segments, is looking to increase its offerings to ventures, which currently include, grants, equity financing, debt and non-convertible debt offerings.
“We are willing to take whichever investment tool, which best supports the requirement of solving the business problems that we are getting to solve,” Mitter said.
The developments come at a time when impact investing in India has remained largely stagnant, in terms of deal activity, over the last two years.
According to data collated by Venture Intelligence, 2015 saw transactions worth $104 million, spread over 57 deals, while 2014 saw investments worth $106 million, across 49 transactions.
2016, till date, has seen 14 transactions, amounting to $42 million.
“We have over 25 portfolio companies in India, making us one of the most active investors in the country. The groundswell of entrepreneurship is so strong in India that we believe it will be short-sighted of us not to tap into it,” Mitter said.
MSDF, founded by Dell founder and billionaire Michael Dell and his wife, Susan in 1999, opened its India office in 2006. The Foundation was also one of the early backers of microfinance institutions, Janalakshmi Financial Services and Ujjivan Financial Services, the latter, which made its public market debut last month, and which saw a massive response from investors.
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