Welcome to our quarterly impact equity investment reports which track private equity transaction activity for
impact investing in India. Through these reports, our intention is to help share knowledge and be a helpful
resource for private equity investors and impact businesses seeking to expand their operations and impact
on the BoP in India. Our previous report provided insights on the trends we had observed as active day-to-day
participants in this market through the first quarter of 2014, and this report continues with the same focus on
impact investment activity in the second quarter of 2014.
In Q1 2014, impact investments were a vital contributor to
transaction volume, comprising 31% of the volume of overall private
equity and venture capital transactions in India. In Q2 2014, this
number dipped with 19 impact equity investment deals, 21% of total
reported deal volume, but still equaling the number of 19 impact deals
in Q2 2014 .
Some of the key trends in impact equity investing in Q2 2014 included:
- A continuing trend of most investments in seed and early-stage
impact businesses was observed, reflecting the youth of this sector;
- BFSI sector got back on the top with 5 transactions in Q2 2014
equaling their record in Q2 2013. The financial services sector picked
up with 4 deals in Q2 2014 from 1 deal in Q2 2013, and was still among
- Weakening in the Renewable Energy sector with 2 transactions closed in Q2 2014 compared to 4 in Q2 2013.
- Strong growth in IT & ITES sector with 3 deals in Q2 2014 compared to none in Q2 2013.
- This quarter saw a downward turn in the number of impact investors
in the from 14 (Q2 2013) to 11(Q2 2014), but an upsurge from mainstream
India-dedicated investors from 2 (Q2 2013) to 6 (Q2 2014);
- Some recent exits like Aavishkar’s first fund getting a full exit
from Milk Mantra, have attracted an even greater investment interest in
the impact investing sector from non impact investors.
- We remain positive on impact equity investments this year, and third
quarter should see increased investments in the wake of a new
government, perceived to be more corporate and investment friendly. The
new budget proves government’s support to investors and entrepreneurs