In early 2013, Hardika Shah, Founder and CEO of Kinara Capital, an Indian Social Enterprise, aimed at addressing the debt gap between microfinance and commercial capital was looking to raise Series A funding of US$1million. While they had already secured lead commitments from two US-based impact investing funds, the Social Enterprise needed help in locating additional investors to meet its full fundraising goal.
Hardika approached IIX to seek help in involving other investors in the round. IIX profiled Kinara on its Impact Partners™ platform and invited Hardika to present in person to Impact Partners members at a Social Enterprise Showcase. This process led to 15 investors co-investing along the lead investors in Kinara’s investment round. Given the large number of investors, IIX created a Special Purpose Vehicle (SPV) that pooled the investors together and eventually, the SPV successfully invested in Kinara Capital. With this capital raise, Kinara Capital was able to scale its business and address the lack of working capital loans to MSMEs in India.
“We are glad that our co-investments with the funds in earlier rounds has enabled Kinara Capital to finance over 1,2001 loans and assist more MSMEs in India”, suggested Elisa Kang, an Impact Partners member and investor who participated in the capital raise. Since then, the enterprise has raised follow-on equity investment from Michael and Susan Dell Foundation in October 2014. “IIX offered a wonderful opportunity to co-invest alongside with two reputable funds, allowing Kinara to fill the funding gap in India’s MSMEs. We are pleased that our patient capital has catalyzed further investments,” said another investor and member (who preferred anonymity).
Launched in 2011, Impact Partners is a private platform for investment in Social Enterprises operated by IIX dedicated to growth-stage Social Enterprises such as Kinara Capital seeking expansion capital. The platform allows flexibility for Social Enterprises to raise their entire capital round on the platform, bring a few of their own investors and close up the round on the platform. The platform also allows for funds to bring in their investee enterprise to be showcased on the platform to attract additional co-investors.
To date, Impact Partners has facilitated close to US$ 10 million worth of investments across 16 Social Enterprises, impacting millions of lives. The Impact Partners platform provides funds with opportunities to list their potential and current Social Enterprises as well as fill in their investment rounds, thereby magnifying their impact. Unique to Impact Partners is the fact that each Social Enterprise on the platform has been assessed on their social and environmental impact in addition to their financial capacity through a market readiness assessment framework. Investors can be assured of access to well screened investment opportunities in high impact organizations across Asia-Pacific, allowing them to maximize their impact while enjoying a clear mandate on financial returns.
IIX recently launched a new and improved website for the Impact Partners platform. The platform is a great way for funds to showcase their current and potential investees through the platform or even for Social Enterprises to round up their investment if they have an anchor investor to facilitate capital raise.
If you are interested in listing your investees on the platform or to find out more information on Impact Partners, please write to us at email@example.com.
By Pranav Shah and Chun Wei Keh
Corporate Finance, IIX
1 As of October 2014