Impact equity investing in the country saw a positive growth and contributed for 23% of the overall private equity transactions during 2013. These investments were spread over 80 deals and had a total value of $390 mn.
This growth is expected to reach 30% of overall equity transactions during 2014, according to a recent report by Unitus Capital.
Financial services saw the highest deal activity (22) in the Indian impact equity segment, followed by agri-business and healthcare, which saw 17 and 13 transactions respectively.
Among financial services, microfinance companies led the group, with 10 investments, some noticeable ones include Janalakshmi Financial Services, Equitas, Satin Creditcare, and Grameen Koota, plus 3 investments in affordable housing finance companies.
Even in terms of deal value, financial services was the leader, with 40% of total investment share. Cleantech with 35% share of investments and healthcare with 12% came in second and third respectively, in terms of deal value.
Two-thirds of the total impact equity investments made in 2013 were in early stage companies, a trend that was also seen in 2012.
In terms of impact investments into early-stage impact businesses, deals under $2 mn accounted for more than half of all transactions.
Highlights from 2013
Financial services saw the largest number of transactions in 2013. Janalakshmi Financial Services raised $56.66 mn, making it the largest transaction in Indian microfinance space since the 2010 crisis.
Among healthcare investments, ophthalmology received a lot of investor attention.
Some of the important ophthalmology investments include, $8 mn Series B investment in Forus Health by Accel Partners, Asia Healthcare Fund, IDG Ventures and seed funding in Welcare by Unitus Seed Fund.
The period also saw some successful exits. These include Lok Capital and Michael & Susan Dell Foundation getting an exit during the Janalakshmi Financial Services’ follow on round and Lok Capital getting an exit from Satin Creditcare Network in the company’s $7.6mn investment round in 2013. Lok invested in Satin in 2008.
Earlier in 2013 impact investor Aavishkaar invested a total of Rs 30 Cr in Ranchi based HR Foods, Pondicherry based CAOS Apparels, Mera Doctor in Mumbai and Nalanda Learning Systems in Kolkata.
In November 2013 search giant Google invested nearly $3.5 mn in 10 Indian social impact organisations that were picked through Google Impact Challenge.
Download the report here.