Indian social venture fund, Aavishkaar, has invested close to $5 million in an education services start-up and a renewable energy start-up. Karadi Path Education is set to receive an investment of approximately $1.5 million while the energy company, Vana Vidyut, will receive approximately $3.4 million. In investing in Karadi Path Education, which will expand its English classes to primary school students in semi-urban and rural India, Aavishkaar has become among a number of other private equity and venture capital funds such as Sequoia Capital and Mumbai Angels, more recently investing in the education sector. The renewable energy sector has also received much attention as national goals aim to raise solar power generation capacity from 250 MW currently to 20,000 MW by 2020.
BANGALORE: Social venture fund Aavishkaar, which manages a corpus of $120 million, has invested in two new ventures, an education services firm and a renewable energy company.
The fund has invested a total of 26 crore across the two firms Karadi Path and Vana Vidyut Pvt Ltd, according to two people familiar with the transactions.
Karadi Path Education Co will receive 8 crore to expand its English language learning operations focussed on primary school students particularly in semi-urban and rural areas.
Separately, Aavishkaar has also invested 18 crore in bio-mass company Vana Vidyut which is expected to set up India’s first grid-connected bio-mass power plant with captive bio-mass feed stock from dedicated energy plantations.
Aavishkaar, a rural and semi-urban-focussed venture fund raised capital which closed a first tranche of $70 million last year, has raised money from a set of marquee investors including International Finance Corporation, Cisco and CDC.
In December 2011, the fund participated in a series funding of Chennai-based Vortex Engineering Pvt. Ltd, which makes low power consuming automated teller machines designed for semi-urban and rural areas.
Both the education and renewable energy sectors continue to be favourable investment destinations for risk capital players, with demand outpacing sluggish supply in one of the world’s fastest growing economies.
The Indian education sector has attracted significant investment play from the private equity and venture capital funds in recent times, with Bangalore-based Edusys Services raising $7.5 million from Sequoia Capital in February earlier in the year, and Mumbai Angels investing 5 crore in eDreams Software Innovation.
Renewable energy sector in India, too, has seen significant investments, as private equity and venture capital try to boost their holdings in the sector, given the country s stated objective to raise its solar power generation capacity to 20,000 MW by 2020 from its current 250 MW.
Last year, Soham Renewable Energy announced that SBI Macquarie Infrastructure Fund had invested 125 crore in the Bangalore-based company’s renewable platforms
In August 2011, Shalivahana Green Energy, which generates power from bio-mass, raised $15 million in equity financing from International Finance Corp, a member of the World Bank Group, to set up new plants across a clutch of Indian states.
Social venture investing in India is once again expected to be rise in 2012, after impact investors largely shied away in 2011, spooked by the fallout from the microfinance crisis that kicked-off in October 2010.
However, investors, including Lok Capital and Omidyar Network, have already announced investments, with a number of other social venture capital funds also expected to follow suit in the coming months.