1. Aavishkaar II
BUILDING BHARAT SUSTAINABLY
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2.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

3. What we set out to do : Aavishkaar,2001
Identify entrepreneurial initiatives targeting low
income socio-economic groups in Rural India
Educate entrepreneurs about venture capital
and provide initial risk capital
Unleash entrepreneurial energy focussed on bottom
quartile to create sustainable and scalable
businesses by providing support in operations ,
strategy and networking
Demonstrate potential for venture capital investment in rural
and BOP markets . Generate social and commercial returns
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4.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

5. What we have done: Our Strategy & Execution Plan
• Pioneered Early Stage Venture Capital Investing in
Rural India
– Set up two early stage venture funds focused on rural India to
invest in enterprises- which procure, serve or sell
products/services or create employment / equity ownership in
rural communities
– Invited LPs willing to provide patient investment that could create
near-commercial returns over a longer period of time with strong
developmental outcomes
• Incubated Businesses with High Growth Potential
– Developed an on ground team to identify entrepreneurs serving
these markets
– Picked up exciting enterprises and backed them with capital,
intensive engagement and networking support
• Focus on West and South India
– Economic activity and infrastructure was conducive for
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entrepreneurs
© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

6. What we have done: Funds launched
 Investment in companies addressing market failures in Rural
India
 Sectors : Healthcare, Education, Dairy, Technology,
First Fund Agriculture, Handicrafts
Aavishkaar – I
 Current status  Fully committed
US$ 14.3 million
 No. of Portfolio Companies  23
First Closing ; 2007
 Attracted 9 follow on investment rounds
Final Closing :2009
 2 exits at a discount
 2 partial exits at IRR of 43% and 65%
 3 write offs
 Investment to build financial infrastructure in Microfinance
Second Fund space
Aavishkaar Goodwell –  Investments in marquee MFIs in India
I
 Current status  Fully deployed
US$ 18.3 million
 No. of Portfolio Companies  7
First Closing 2007
Final Closing 2008
 1 partial exit at an IRR of 168%
 Attracted 8 follow on investment rounds
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7. What we have done: Portfolio Buildout
WAVE ONE (FY’2002-06) CHARACTERISTICS
• Entrepreneurs: Local focus, honest and ethical
Servals • Stage: Very early stage / high risk ventures
• Capital needs: Low
SKEPL • Scalability: Modest
• Exit: Unforeseeable exit at time of investment
Tide Technocrats
QUESTIONS FROM ENTREPRENEURS
Craftsbridge • What is Equity?
• What do I have to give in return?
Net Systems • Do I have to pay dividend?
• What rate of interest does Aavishkaar charge ?
Naveen gram
OUR EFFORTS
• Handholding / Mentoring: Extensive engagement
Number of Investments Made : 6
 Making companies investment ready
Total Invested Capital: INR 18.5 Mn
 Putting systems and processes in place
 Developing business plans
 Strategic and operational support
Our first few portfolio companies required extensive support post investment
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8. What we have done: Portfolio Buildout
WAVE TWO (FY’2007-08) CHARACTERISTICS
• Entrepreneurs: Very focused; with Vision clarity
Vaatsalya • Stage: Early stage / Moderate risk ventures
• Capital needs: Moderate
Vortex Engineering
• Scalability: High
CK Technologies • Exit: Strong potential exit opportunities
DAH Delhi QUESTIONS FROM ENTREPRENEURS
• How much equity / dilution?
DAH Jaipur
• What will the company gain due to equity
DAH Bhuj infusion?
• How will Aavishkaar help in improving our
Rangsutra business?
OUR EFFORTS
Number of Investments Made : 7 • Handholding / Mentoring: High engagement
 Scale up support
Total Invested Capital: INR 111.3
 Fund raising support
MM
 Strategic advice
Our next wave of investments were in business models which were more proven and profitable
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

9. What we have done: Portfolio Buildout
CHARACTERISTICS
WAVE THREE (FY’2010-11)
• Entrepreneurs: Sophisticated and articulate
Waterlife India • Stage: Early stage / Proven business models
• Capital needs: Significant
Saraplast • Scalability: Rapid
B2R • Exit: Strong potential exit opportunities
Swas Healthcare QUESTIONS FROM ENTREPRENEURS
Zameen • What valuation and which instruments?
• Tranches and Investment Structuring
Butterfly Fields
• Benefits of Aavishkaar’s partnership
G V Meditech • Board participation and key rights
INI Farms
Milk Mantra OUR EFFORTS
• Handholding / Mentoring: Moderate engagement
M-health  Strategy and long term vision formulation
 Networking support
Number of Investments Made : 10
 Fund raising support
Total Invested Capital: INR 232.7MM
Our most recent investments have been in highly scalable enterprises led by very
professional management teams 9
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10. What we have done : Refined Our Investment Philosophy
Learnings from our experience between 2002-08, has helped to
considerably refine our investment philosophy
 Greater focus on scalable businesses
Dealing with fewer “unknowns”
-Investments with defined investment-demonstration-progress
linkage
-Clarity on capital needs
- To demonstrate viability of idea
- For further growth
Ability of entrepreneurs to scale and build the business
Investees would in turn, need more support in capital planning, fund
raising and organisation building
On account of the above, these companies needed more capital to support their
growth and scale as reflected by the higher ticket sizes of our investments
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11. What we have done: Development Impact of Portfolio
Companies
Our Portfolio companies outreach totals over 2.6 million disadvantaged people
Over 60% of the Aggregate
investee outreach economic value
comprises benefit of over
women US$40 during
2010-2011
For every rupee Carbon
invested our Emission
portfolio companies Reduction
have generated an 84,295MT
economic value
benefit of 22x
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12.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

13. What we learnt: How to tap potential of rural economy
OBJECTIVES CHALLENGES
• Use investing as a tool to bring • Talking about high risk investments
about development sustainably to in meltdown times of 2001
Rural India
• Explaining „equity‟ to entrepreneurs
• Demonstrate effectiveness of • Learning investing by doing it
venture capital model toward early
• Seeking the manner of „EXIT‟
stage investing in Rural Economy
LEARNING
• We were right in our hypothesis “ Rural India has opportunities
galore”
• We were early in our estimation “ Rural India is ready for equity”
• Our lack of understanding of challenges was adequately supported
by the right amount of over confidence
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14.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

15. What has changed
The market has evolved
– Quality professional manpower getting interested in the rural economy
– Changing landscape in the rural and underserved market with heavy
public investment in infrastructure
– Growing levels of income and awareness creating need and demand for
quality products and services
Investor interest has taken off; Mainstream and social funds
have emerged on the horizon
– Rural India has emerged as a big market in the last decade with all
major corporations vying for a share
– Mainstream and Social Venture Funds willing to support enterprises
serving these markets, reinforcing our belief
The underserved/poorer parts of India have seen improved governance
and experienced exceptional growth
– States like Bihar, Rajasthan, MP, UP have started experiencing
investment activity in sectors such as renewable energy, agriculture and
microfinance
– Investors interest at these states as untapped market for basic
products/services Venture Management Services- Confidential and Proprietary Information 15
© 2010 Aavishkaar

16. What has changed: Underserved states as new
opportunities
Aavishkaar believes that Rural India and changing development
dynamics offer new opportunities that are largely untapped
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

17. What has changed: Demand Growth
• Cumulative government spend in No. of Households –’000)
Rural Employment various rural areas to double in three
Guarantee Scheme
years from the current USD 27Bn
• Efficacy of this spend will improve
due to the UID programme
• Yield growth acceleration & rise in
prices of soft commodities have
Rising Farm ushered in buoyancy in incomes
No. of Households –’000)
Income • Tractor sales, for example, have
grown at 10% annually in the past 5
years versus 3.4% annually in the
previous ten
• Rural Monthly Per Capita Consumption
Expenditure growth has overtaken urban rate
Consumption
• Consuming HHS in rural India 2X in urban
Growth
India
• Stark differences between urban-rural
consumer spending pattern, different Source: NCAER, IIFL
business models needed to address rural
Rural population offers a potentially huge market opportunity but requires
needs
goods/services which match their needs 17
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18. What has changed: Investor interest in BOP market
Major funds‟ interest in rural India is on the rise, but prefer larger ticket
sizes
Company Sector Investor Amount
Suminter Organics Agriculture Nexus Ventures, Capricorn USD 6.2 mn
Dlight Design Renewable Nexus Ventures, DFJ, Acumen USD 5.5 mn
Energy Fund, Omidyar Network, GGV
IL&FS Education Education India Equity Partners USD 37 mn
and Technology Services
Services
Vasan Eye Care Healthcare Sequoia India USD 22 mn
These funds do not have pipeline access in this space and
are not designed to invest in early stage
Long track record, local presence, high visibility and deep insights in
the emerging pipeline in the market provide Aavishkaar an unique
advantage over both established and emerging funds in the space
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19.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

20. What will we do next: Aavishkaar Strategy - Sow-Tend-
Reap
T0 - T0+2 yrs T0+2yrs - T0+4 yrs T0+4 yrs – T0+6 yrs
SOW TEND REAP
• No of companies: ~ 15 • No of companies: ~15 • No. of companies: ~5
• Investment Size $0.5- $2 Mn • 7-8 SOW stage companies
• Investment Size: $3–$5 Mn
• Investment Size: $6-8 Mn
• 15-25% of the capital • 30-40% of the capital • 20-30% of the capital
Screening Factors Screening Factors Screening Factors
• Experienced Entrepreneurs • High growth stage • Graduated from SOW and
• Innovative Business models • Exit opportunities TEND stages
• Rapid growth and visible exit
Aavishkaar Inputs Aavishkaar Inputs Aavishkaar Inputs
• Mentoring • Managing growth
• Advisory and execution • Strategic guidance complexities
support • Branding and visibility • Preparing for IPO /
• Network extension Acquisition
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21. What will we do next: Opportunities and Strategies
CHARACTERISTICS
Start Ups
•First generation / Serial entrepreneurs
•Domain knowledge and sector expertise
•Prior management experience in similar
businesses
STRATEGY: FOCUS ON SCALABLE BUSINESSES
300 MM IN 3 YEARS? INNOVATIVE BUSINESS
MODELS, KNOWLEDGE EDGE
STRATEGY: TAKE LARGE POSITIONS
INVEST EARLY FOR SIGNIFICANT STAKE: ~20% -
40%
STRATEGY: EXTENSIVE MENTORING.
A LITTLE MONEY, A LOT OF TIME IN THE EARLY
STAGES
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22. What will we do next: Opportunities and Strategies
CHARACTERISTICS
Existing •Existing companies already in the market
Businesses •Technology, cost and supply scalability of
products/services validated
•Market acceptance and reach established at a
local/regional level
STRATEGY: TEAM, TEAM, TEAM!!!
BUILD STRONG MANAGEMENT
STRATEGY: OPERATIONS AND SYSTEMS
INCORPORATE BEST BUSINESS PRACTICES,
CORP. GOV
STRATEGY: TAKE TO NEXT LEVEL
STRATEGY GUIDANCE, CREATING VISIBILITY,
BUILDING BRAND
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

23. What will we do next: Learning from our past investments
CASE STUDY: VAATSALYA HEALTHCARE We will invest large amounts into
500 our successful companies at 500
reduced risk
Funds Raised (INR Mn)
200 Funds Raised (INR Mn) 200
7.1 60 7.1 60
Series A Series B Series C Series D* Series A Series B Series C Series D*
Aavishkaar 2006 2008 2009 2011 Aavishkaar 2006 2008 2009 2011
Investment 7.1mn 20mn 0 0 Investment 7.1mn 40mn 100mn 0
Stake 27% 25% 14% 10% Stake 27% 45% 40% 28%
AAVISHKAAR - I AAVISHKAAR - II
• We invested early, took higher risk • We will invest early, take higher risk but put more money
• The upsides were taken away by Series B/C investors who in subsequent rounds to avoid dilution, and get rewarded
invested in a relatively de-risked business model for our early stage investing
STRATEGY: BACK THE WINNERS
FURTHER INVEST IN STAR PERFORMERS, READY
THEM FOR MERGER/ACQUISITION OR IPO
2Current
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value: As of Mar’14
* Fund raising in progress © 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

24. Recognition: Our Entrepreneurs
Empowerment through Ownership
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25. Recognition: Awards and Accolades
G20 SME Finance Challenge, November 2010
L-RAMP Fostering Award for
Excellence, December 2007
UNDP World Business Award, May 2006
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26. Recognition: News Coverage
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27.  What we set out to do
 What we have done
 What we learnt
 What has changed
 What we will do next
 Aavishkaar - II
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

28. Aavishkaar II: Snapshot
“Delivering commercial returns to investors by investing in scalable enterprises
Focus in underserved markets of India with strong development outcomes”
Size & term Size: $ 120 million (Foreign fund);
Investing Strategy
Sow Tend Reap
Exit Routes Combination of third party sale, acquisition and IPO
Management 2 per cent during investment period and 2 per cent of invested capital
Fee after investment period
Term 10 years (1 + 1 year extension)
Target IRR 20 per cent (net of
fees)
Hurdle Rate 8 per cent
Carried 20 per cent
Interest
Pre-op Lesser of $750,000 or 1% of the fund size
Expenses
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© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information

29. Aavishkaar II: Snapshot
• Aavishkaar II achieved its First Close on Sep 30, 2011 with a Total
Commitment of USD 64.7 million
• During December 2011, KFW provided additional commitment of USD 6.5
million. Total effective commitment currently stands at USD 70.3 million.
(USD million)
Total
Commitment Addl. Top-up Aggregate Effective
Investor at First Close Commitment Commitment Commitment Comments
I CDC 25 25 25
Effective Commitment
II IFC 15 15 14.1 capped at 20% of the
Aggregate Commitment
III CISCO 10 10 10
IV FMO 7.5 7.5 7.5
V KFW 7.2 6.5 13.7 13.7
Total 64.7 6.5 71.2 70.3
• Final Close expected be achieved by March 2013
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30. Aavishkaar II: Snapshot
Expected Sector-wise Investment split
Total Invested
Strategies No. of Deals (USD M)
I Health Water and Sanitation 6 27
II Education 5 19
III Agriculture 6 25
IV Renewable Energy 4 18
V Other Emerging Sectors 2 9
Total 23 98
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31. Aavishkaar II : Six investments made till date
Vortex Engineering Karadi path Milk Mantra
• Design, manufacture of • A non‐linear English • Farm to table dairy company
Low‐cost ATMs capable of teaching methodology based in Low Income State of
operating in remote rural/ suitable for large number of Odisha
semi‐urban regions at fraction government and affordable
of cost of conventional ATMs private schools • Tend Stage Investment
• Tend Stage Investment •Sow Stage Investment • Commitment - $ 1.8 Mn
• Commitment - $ 2.4 Mn • Commitment - $ 1.5 Mn
Vana Vidyut EPS mHealth
• Biomass‐based power • Manages and deploys • Provides medical advice
generation using owned / ATMs on behalf of banks, by phone for rural mass
leased energy plantations thus enabling branchless markets.
as the source of feedstock banking in urban and rural
India • Sow Stage Investment
• Sow Stage Investment
• Sow Stage Investment • Commitment - $ 0.7 Mn
• Commitment - $ 3.3 Mn
• Commitment - $ 1.9 Mn
© 2010 Aavishkaar Venture Management Services- Confidential and Proprietary Information 31

32. Aavishkaar II: Our edge in impact investing
• High quality portfolio comprising companies that are innovatively and
sustainably targeting fundamental market needs, inefficiencies and defining the
sector. Most of our companies are considered as pipeline for strategic acquisitions
and major venture funds
• A proprietary pipeline of start-ups scouted through our long -term
partnership with incubators and on-ground presence of 10 years
• A collaborative approach with active need–based hand holding on diverse
dimensions including fund raising, strategic advice, networking, early-stage support
• Our investments have been catalytic in triggering subsequent funding
rounds
• We are recognized as a sector builder and have facilitated prominent events
such as Sankalp and Srijan in the bottom-of-the-pyramid and microfinance space
• Early stage nature of investing in a space with limited competition allows us to get
in at low valuation
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33. Aavishkaar II: Key Principals
Vineet Rai  Vineet is founder and Managing Director of AVMS with over 17 years of experience in
leading innovative interventions in the development sector.
Managing Director And
 He has experience in small business incubation, SME sector, microfinance and venture
Founding Partner
capital investments.
 He is CEO and co-founder of Aavishkaar India Micro Venture Capital Fund and the Co-
founder and Director of Intellecap.
 He is an Ashoka Fellow and holds a Post-Graduate diploma in Forestry Management from
Indian Institute of Forest Management, Bhopal.
Pradeep has been associated with Aavishkaar since its inception in early 2002 and brings
P Pradeep

with him over 16 years of operational and investment experience in sectors including
Director farming and allied activities, agro processing, renewable energy, manure and fertilizers,
And Partner healthcare services and delivery, micro-finance and financial services delivery.
 Pradeep has been closely involved across all stages of the deal spectrum for all investee
companies, both pre and post investment, and also is a board representative on some
companies
 Earlier, he worked for an integrated sugar complex engaged in the production of sugar,
molasses, alcohol, manure and cogeneration of power, where he had been closely
involved in the financial structuring for new domestic projects, valuation and takeover
procedures of co-operative sugar factories as well and in discussions with overseas
venture capitalists for sugar projects in the ASEAN region
 Pradeep holds a MBA with specialization in finance and is a Bachelor in Applied Sciences
(Engg.).
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34. Aavishkaar II: Company structure
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35. Contact us
Vineet Rai
Email: vineet_rai@aavishkaar.org
Mobile: +91 98206 45736
P Pradeep
Email: p_pradeep@aavishkaar.org
Mobile: +91 98403 95004
Investment Advisor
Aavishkaar Venture Management Services
516, Palm Spring l Link Road l Malad (W)
Mumbai, India
Tel: +91 22 4200 5757
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