India’s oldest and largest for-profit impact investor, Aavishkaar supports businesses that deliver significant impact to underserved populations in semi-urban and rural geographies, be it by improving livelihoods or by offering critical goods and services that bridge the wide urban-rural gap in India. It continues to serve this objective through its latest investments in primary healthcare service provider mHealth, dairy HR Foods, preschool chain Nalanda Learning Systems, and organic apparel manufacturer CAOS Apparels. In keeping with Aavishkaar’s emphasis on the low income states of India that fare particularly poorly on most social and economic metrics, three of the current investments are in such geographies.
mHealth, also known as Mera Doctor, provides 24X7 primary healthcare consultations remotely over phone in the low income state of Uttar Pradesh, a large but extremely underserved healthcare market. It also bundles other healthcare products such as hospital cash insurance, personal accident insurance and discounts at over 1,000 pharmacies and diagnostic centres in its pre-paid health kit. Promoted by Dr Ajay Nair, a trained doctor and Gautam Ivatury, who has earlier worked with CGAP, SKS Microfinance and IFC, mHealth plans to use Aavishkaar's infusion to significantly expand its presence in Uttar Pradesh, before entering other states.
Jharkhand based HR Food was set up by a team of finance and sales professionals, Abhinav Shah, Rakesh Sharma, Abhishek Raj and Harsh Thakkar, and aims to build an integrated dairy operation in Bihar and the milk-deficit state of Jharkhand, both low income states. The company’s first milk processing plant is being established in Ranchi, a city with limited presence of organized players in the sector. It targets building a milk procurement network of about 7,000 farmers in Bihar and Jharkhand to whom it would also provide ancillary services such as facilitating bank financing, cattle purchase and insurance and providing access to quality veterinary services, feed, fodder and medicine. Aavishkaar’s investment in HR Food is India’s first institutional equity investment in Jharkhand’s dairy sector.
Both mHealth and HR Food have been incubated with Aavishkaar’s support, in line with the firm’s strategy of investing in very early stage businesses and supporting them to scale through several future rounds of investments. This adds to Aavishkaar’s track record of having been the first institutional investor in more than 90% of its investments so far.
Aavishkaar’s latest investment in the education sector is in Nalanda Learning Systems, which operates a chain of 11 affordable preschools in Eastern India under the banner ‘Little Laureates’. Currently present in West Bengal, Bihar and Tripura, the company plans to expand to Orissa, Jharkhand, Chattisgarh and other low income states in the next five years. Preschooling is an important part of a child’s initial education and has been recognized to have a positive impact on a child’s future completion of formal primary education. India’s low incomes states fare poorly on literacy indicators as compared to the rest of the country. With 75% of ‘Little Laureates’ footprint planned in tier 2 and tier 3 towns, the company plans to bridge this gap where it is the widest. Its promoters Timir Mukherjee and Tamal Mukherjee come with significant operational experience in financial services and education.
The fourth of Aavishkaar’s current investments is in CAOS Apparels, a Puducherry based manufacturer of Fairtrade certified, organic cotton apparel. It caters to a growing group of boutique, premium apparel brands across Europe, Australia and Japan that promote ‘sustainable fashion’ – the use of socially responsible practices in the textile sector. CAOS stands out amongst other apparel manufacturers for its emphasis on rural women’s empowerment. About 70% of its work force comprises women, many of whom hail from fishing and farming communities in villages surrounding Puducherry, and were unskilled prior to joining CAOS. It continues to impart vocational training to women and is piloting a de-centralized rural operations model that would generate local employment for women within their villages. The company itself is promoted by woman-entrepreneur Anjali Schiavina, who has had two decades of experience in the leather and apparel industry in Europe and India.
Speaking on the investments, P Pradeep, Executive Director and Chief Investment officer of Aavishkaar said “We are excited to be able to partner with entrepreneurs who are committed to building a business in these challenging but highly underserved markets. Our investments are reflective of our faith in these entrepreneurial teams, their vision and our relentless focus on taking risks that commercial capital is not able to take, to not only generate financial returns but create impact that was not possible otherwise. We believe our investments are designed to address significant latent demand potential in the markets. We are very happy with the spread and diversity of these investments and believe that each of our investments is either generating local livelihoods or reducing serious vulnerabilities of the local population to issues that afflict their daily lives.”