Lok Capital Fund I Exits from RuralShores With 6X Returns [Impact Investing]

Impact investment fund, Lok Capital has announced that it has exited from the investment made in RuralShores from Lok Capital Fund I, in 2009. The exit is highly profitable for Lok Capital, generating six times the initial investment (in rupee terms).ruralshores

RuralShores, India’s first rural BPO (business process outsourcing), was the first non-MFI company in Lok Capital’s portfolio, and helped shape Lok Capital’s broader investment philosophy on impact investing. Lok Capital continues to be an investor in Rural Shores through its investment from Lok Capital Fund II, made in 2011. Apart from Lok Capital, HDFC is also an early investor in RuralShores.

Established in May 2008 by Mr Murali Vullaganti, RuralShores was created to bring jobs to villages, rather than moving rural people to city jobs. RuralShores aims at improving skill sets of rural youth, providing local employment and curb migration and increasing income levels of the target group.

Today, the company has 18 delivery centres across various Indian states and employs over 2500 rural youth. The company achieved revenues of Rs 31.5 crore in FY2013. Significantly, women constitute 45% of the RuralShores workforce.

The Rural Impact

RuralShores has found that, on joining, an employee’s annual household income increases by 100% and family savings go up by 20%. While RuralShores has created an impact among rural households, the company has been able to climb the BPO value chain. Having started providing remote processing of non-critical business transactions, the company has diversified into higher-end BPO services in customer care and payroll management. RuralShores serves over two dozen clients including leading telecom and IT companies, as well as the Government.

“This investment proves that livelihood generation is a sustainable way to create inclusion among the low income group. The model is replicable in various  sectors and has the potential to open up endless opportunities to create impact”. Venky Natarajan,  Managing Partner, Lok Capital.

The BIG Investor Validation

Lok Capital’s investment in RuralShores and the subsequent exit validates investment in livelihood-focused business models.

Lok Capital’s current portfolio includes leading microfinance companies and investments across SME lending, retail lending, healthcare and education. Profitable exits thus far include Spandana, Janalakshmi and Satin.

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