Funds managed
| Fund name | Asset Class | License |
| Maharashtra State Social Venture Fund | Social Venture | SEBI AIF Cat 1 |
| SME Growth Fund | SME | SEBI AIF Cat 1 |
| India Opportunities Fund | VC/ Growth | SEBI AIF Cat 1 |
| Samridhi Fund | Social Venture | SEBI AIF Cat 1 |
| TEX Fund | SME | SEBI AIF Cat 1 |
About the AMC
- Established: November 2015
- The primary investment focus of the fund is to identify and invest in profitable and scalable business ventures, including an innovative business model or new products and technologies. In this article, we will look at the Maharashtra State Social Venture Fund in detail. (https://www.indiafilings.com/learn/maharashtra-state-social-venture-fund/)
- SIDBI Venture Capital Limited (SVCL), incorporated in 1999, is an investment management company and a wholly owned subsidiary of SIDBI (www.sidbi.in), the Apex Financial Institution in the country for the MSME sector. Over its life, SVCL has managed funds focused on different themes including Startups/ early stage technology businesses, manufacturing SMEs, service entities, agri businesses, financial inclusion companies, etc.
Investment Philosophy (for firm)
The primary investment focus of the MS Fund is to identify and invest in profitable and scalable business ventures including innovative business model or new products and technologies which would have potential to provide social benefits (economic and/or societal and/or environmental) to the people of Maharashtra. They are sector agnostic.
Media
Title: Hyperlocal delivery startup Grab secures $1.3 million from Maharashtra State Social Fund, Source: Financial Express, Date: 22 February 2018
The company has raised a total of $2.3 million. Grab had previously raised an undisclosed amount of debt financing from Aramex Ventures. Prior to that the company had raised a seed round of investment of $1 million from Oliphans Capital and Haresh Chawla.
Hyperlocal delivery startup, Grab, has secured $1.3 million in its latest round of investment from Maharashtra State Social Venture Fund, which is an investment arm of the SIDBI Venture Capital. According to the filings, the company has allotted 10 equity shares of Rs 10 each with a premium of 19,219.67 each and 89,807 debentures.
Founded by Pratish Sanghvi, Jignesh Patel, and Nishant Vohra in 2012 the company enables last mile food delivery. The startup currently caters restaurants, food delivery companies, grocery stores, banks and ecommerce companies.
The company has raised a total of $2.3 million. Grab had previously raised an undisclosed amount of debt financing from Aramex Ventures. Prior to that the company had raised a seed round of investment of $1 million from Oliphans Capital and Haresh Chawla.
Maharashtra State Social Fund (MS Fund) is an AIF, Alternative Investment Fund, which was established in September 2015 as a close ended unit scheme of Maharashtra Laghu Vikas Trust. The website states that SIDBI Venture Capital is the only investment manager of the fund while SIDBI Trustee Company Limited is the sole Trustee of Fund. The fund has a corpus of $31.2 million.
On its website, Grab claims to have worked with the likes of Snapdeal, Big Bazaar, Pizza Hut, KFC, Patanjali, among many others. Further they claim to have delivered over 89 lakh orders with 3305 merchants across 23 cities.
According to a report, the Indian foodtech market is projected to grow at 12 percent CAGR during 2016-2021. The report further added that the growth in the market is directly related to the increasing disposable income , growing average household income and the rising concept of double income (no kids) concept. The growing internet infrastructure has gone up from 10 percent in 2011 to 27 percent penetration in 2015, and increasing smartphone users from 123 million in 2014 to 167 million in 2015.
Another report from Statista quotes that the food-delivery segment is expected to record $3 billion in revenues this year. It further adds that they expect the revenue to show CAGR of 16.7 percent resulting in a market volume of over $5 billion by 2022.
Title: Sidbi to rate venture capital funds before investing in them, Source: Live mint, Date: 30 October 2018
The Small Industries Development Bank of India (Sidbi) is developing an internal model to rate venture capital (VC) funds before investing in them through its fund of funds, a top official said. The idea is to ensure transparency, efficiency and lower subjectivity in making investing choices. A fund of funds, like the one Sidbi has, invests in other funds, rather than buying individual stocks or bonds. As part of its Startup India Action Plan, the government set up a ₹ 10,000 crore fund of funds within Sidbi in 2016, to be deployed over the 14th and 15th Finance Commission cycles.
“Earlier, we used to appraise the funds and there was an element of subjectivity,” Mohammad Mustafa, chairman and managing director of Sidbi, said in an interview. “We are now introducing an internal rating model which will score the VC funds on the basis of various criteria like management quality, performance of the fund, their focus etc. If the firms are able to cross the threshold score, they will be eligible to receive funding under the fund of funds scheme,” Mustafa said.
This will introduce predictability in the deployment process and the VC funds will be able to know if they are eligible to get money under the fund of funds scheme or not, Mustafa added.
So far, an approximate sum of ₹ 1,500 crore has been deployed under the fund of funds scheme. “The total deployment is likely to touch ₹ 3,500 crore by the end of the current fiscal,” Mustafa said. Under the scheme, category I and II alternative investment funds (AIFs) are eligible to receive contribution from Sidbi. The funds are then required to invest at least twice the amount of contribution received.
Even as the development finance institution (DFI) is actively looking to back India’s startup ecosystem, it is also sharpening its focus on the social sector through the rating model.
Asked if a separate social impact fund is being planned, Mustafa said: “There is a lot of scope under the scheme (fund of funds) for allocation towards the social sector. While working on the rating tool, we will also be taking the deployment mechanism to the next level by deciding allocations for social impact funds, maiden fund raises and older venture capital firms.”
According to data provided by Sidbi, it has backed eight social impact funds, committing around ₹ 365 crore from its fund of funds. Aavishkaar Bharat Fund, Omnivore Partners India Fund II, Samridhi Fund and Menterra Social Impact Fund are some of the funds which have received funding from Sidbi.
The financial institution is also revamping its asset reconstruction company (ARC), India SME Asset Reconstruction Company. “We are restructuring the entire ARC. There has hardly been any activity there and it has been performing at a sub-optimal level. There was no clear focus so far,” he said. The firm has hired Deloitte India as a consultant to assist with the restructuring.
“The consultant has already submitted its study and has suggested moving from a pure play asset reconstruction model to asset management model. As per the plan, we will also be opening up the business for expertise from outside Sidbi. The proposal has been put forth for approval for other shareholders. Once approved, the plan will be implemented,” Mustafa said.
He added that a decision will be taken by the shareholders if a distressed asset fund will be set up as part of the restructuring process.
Shareholders of Sidbi’s ARC include Bank of Baroda, United Bank of India, Punjab National Bank, Dena Bank, Corporation Bank, Life Insurance Corp. of India and UCO Bank.
Title: SIDBI Venture Capital Raising Rs 1,000 Cr Third Fund, Source: VCcircle, Date: 16 June 2009
https://www.vccircle.com/sidbi-venture-capital-raising-rs-1000-cr-third-fund/
SIDBI Venture Capital (SIDBI VC) Ltd, a state-owned venture capital firm dedicated to small and medium enterprises, is raising its third fund, targeted at a corpus of Rs 1,000 crore ($250 million). It has also appointed Harsh Kaul, the former chief general manager of SIDBI as its CEO. Harsh Kaul was previously with the venture capital division of SIDBI, which largely deals with the fund of funds operations. He was appointed as the SIDBI VC CEO on April 16.
“Right now I am in the process of launching our third fund at SIDBI Ventures. We are setting up Rs 1,000 crore fund,” Kaul told VCCircle in an interview.
Kaul succeeds Ajay Kumar Kapur, who has moved back to the parent Small Industries Development Bank of India (SIDBI). Kapur is posted in SIDBI headquarters at Lucknow.
Parent SIDBI has already made an anchor investment of Rs 200 crore in the fund. SIDBI VC is currently in talks with various financial institutions and banks for raising the remaining amount of Rs 800 crore. Kaul expects to make a first close at Rs 500 Cr in next three months. Though the fund will be sector agnostic, it will concentrate on investing in sectors like agro-based sectors, clean technology, IT and the retail sector.
SIDBI Venture Capital will follow the strategy of making smaller investments, Kaul said. “Over the years we have earned the perception that we are not interested in smaller investments. There are a lot of VC funds that are prepared to invest Rs 30-60 crore, so we would concentrate more on smaller investments.” However, that does not stop the VC fund from making some large investments opportunistically.
According to Kaul, in the current times of economic slowdown, sectors that are focused on the domestic demand in India are expected to do well. He said, “I feel that most of the units that are not into export and are in the domestic market have not really been affected by the slowdown and will continue to do well.”
He views sectors like the agro food processing, warehousing, logistics and healthcare as the less recession impacted sectors.
The firm also has a Rs 2,000 crore risk capital fund which was announced in the union budget. The Reserve Bank of India (RBI) has allocated Rs 1,000 crore towards this fund as a loan. Kaul is managing the risk capital fund as well.
While SIDBI VC’s first fund is fully committed, its second fund, which is an SME growth fund, has only enough funds left for the investments in the second rounds of funding of the existing portfolio companies.
SIDBI VC’s first fund was called the National Venture Fund For Software and IT Industry, which was a Rs 100 crore fund. While parent SIDBI has contributed Rs 50 crore to the fund, the ministry of information technology and IDBI had contributed Rs 30 crore and Rs 20 crore each.
Its second fund, which is an SME growth fund, has a targetted corpus of Rs 500 crore and a life size of 8 years. “The fund life is also coming to an end in September 2012 so we are really not looking at investments where we can’t get the exits before 2012,” Kaul told VCCircle.
Analyst questions
- Can you enlighten us with your investment philosophy?
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