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October 16, 2012

Social VC investments down 47.5% in first 9 months

Social Ventures attract 11 investments worth $45-M in Q3’12

Social Venture Investors (also called Impact Investors) participated in investments worth $45 million across 11 transactions in India during the three months ending September 2012, according to a study by Venture Intelligence. Of these, three investments were co-investments with regular VC firms. The impact investment figures were flat compared to the same period in 2011 (which had witnessed $43 million being invested across 11 transactions), but significantly higher than the immediate previous quarter (about $22 million across nine investments). The latest figures take the total Social VC investments in the first nine months of 2012 to $103 million across 31 deals, down 47.5% in value terms (21% in volume) compared to the $196 million across 39 deals during the same period in 2011, the Venture Intelligence research showed.

The Rs.80 crore (about $14.5 million) fourth round funding raised by Bangalore-based urban microfinance firm Janalakshmi Financial Services (from Gawa Microfinance Fund, the India Financial Inclusion Fund and well known investment banker Vallabh Bhanshali) was the largest investment in the social sector during Q3’12. Apart from Janalakshmi, the period also witnessed four other microfinance firms attracting investments. In a transaction funded by Aavishkaar, IntelleCash Microfinance Network acquired a 56% stake in Kolkata-based microlender Arohan Financial Services providing an exit for existing investor Bellwether Microfinance Fund. Bellwether also exited Bangalore-based Ujjivan Financial Services by selling its stake to Lok Capital. In addition, Bangalore-based Vistaar Livelihood Finance and Allahabad-based Sonata Finance also attracted investments during Q3’12.

Omidyar Network backed Kolkata-based low cost BPO iMerit Technology Services, a spin off from the NGO Anudip Foundation, while Ventureast and responsAbility invested in rural BPO firm Desicrew Solutions. Bangalore-based Babajob Services, which runs online job portal for office and domestic help workers, raised capital from Gray Ghost Ventures, Vinod Khosla and other angel investors.

Acumen Fund announced two investments in the latest quarter – $250,000 as debt and equity in Avani Bio Energy and $300,000 in Edubridge Learning. Pittoragarh, Uttarakhand-based Avani creates pine needle gasification power projects for remote communities in northern India. Acumen’s investment will allow Avani, which was founded by the husband and wife team of Rajnish Jain and Rashmi Bharti, to create 20 operational plants within five years. Mumbai-based Edubridge provides vocational skills training for low income youth across Maharashtra, Tamil Nadu, Karnataka and Chhattisgarh.  

The data for this note has been sourced from the Venture Intelligence Social Venture Investments Database. The detailed analysis of the quarterly data is available to subscribers as part of the quarterly Venture Intelligence India VC Report. 

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