Temasek-backed ABC Impact bolsters India investment focus with second fund
Mumbai: Temasek-backed impact investment firm ABC Impact is ramping up investments in India with its second fund. The fund, with a target corpus of $650-750 million, marked the first close at $550 million in January. Around one-third of this amount will be earmarked for social and impact investments in India, Sugandhi Matta, chief impact officer, ABC Impact, said in an interview.
ABC Impact, a growth-stage investor, had backed homegrown firms such as agritech startup Cropin, edtech startup Vedantu and healthcare startup Healthcare at Home from its $300-million first pan-Asia fund. “We are very bullish on India as a market. Roughly one third of our first fund was invested in India and we are expecting to maintain that ratio from the second fund as well,” said Matta.
According to David Heng, chief executive officer, ABC Impact, India is a very stable market. “The potential in India is immense. The quality of founders is phenomenal. India has been an early adopter of technology, and has a fair bit of challenges where impact investors can play a part by supporting businesses that bring about a change,” he said. “Mission-aligned founders are seeking mission-aligned investors like us.”
The fund will support companies seeking Series B funding and beyond, said Matta. “Our style of investing is very evidence-based and we are looking to deploy capital in equal measures across social and climate opportunities. However, valuation continues to be a challenge in the Indian market. Our investment in the country will be a matter of timing and correct pricing.”
“We are looking to write cheques anywhere between $10 million and $45 million,” said Matta, an engineer and MBA graduate, with nearly two decades of investment experience with firms including Leapfrog, Actis, and Temasek.
It backed 12 startups from its first fund raised in 2019. With the first fund fully deployed, ABC Impact will now begin investing from its second fund.
The final close of the second fund is likely to be announced by the end of the year. Though Matta refused to divulge the target corpus, people in the know said it is looking to raise $650-750 million. The firm is backed by Temasek Trust, Pavilion Capital, MapleTree, Seatown Holdings, SP Group and Sembcorp.
“We are looking to expand our LP base in the second fund. A lot of global sovereign wealth funds, and family offices, among others, have evinced interest even as our existing investors are reupping their commitments,” Matta said.
The firm is betting big on financial and digital inclusion, agritech, healthcare and climate tech, and has built a pipeline of investments in India, she added.
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Published: 28 Feb 2024, 06:22 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.