| 23-04-2017

Avishkaar Goodwell funds exit Suryoday

The Aavishkaar Goodwell funds have exited microfinance institution Suryoday Micro Finance. Suryoday is one of 10 companies that have received in principle approval for a small finance bank license from RBI. With this exit, the funds have generated strong US$ returns by exiting to aligned investors who have taken the mantle of being long term supporters of Suryoday. Aavishkaar Goodwell invested in Suryoday Micro Finance in 2009 as a venture partner right at the ideation stage assisting Baskar Babu, Promoter and CEO in fulfilling his goal of building a successful and professionally runinstitution. The investment commitment was made by Aavishkaar Goodwell prior to the commencement of its operations that included providing loans to urban women from economically weaker sections. Aavishkaar Goodwell has supported Suryoday through its rapid growth journey from being a microfinance institution to receiving the “in principle” approval from the Reserve Bank of India to be a small finance bank (SFB).

Suryoday has witnessed immense growth in the last seven years. The company has a gross loan portfolio of USD 154million as on March 2016 and cumulatively it has disbursed INR 29,800mn (>USD 550mn) since inception. As Suryoday transforms into a Small Finance Bank, it aims to continue to make significant strides towards financial inclusion of people living at the bottom of the pyramid, not merely by providing credit, but through initiatives that focus on increasing the savings habit among the poor, and financial literacy, which has enabled them to graduate into a formal banking system.

For Aavishkaar, one of the world’s leading impact investors this is its 21st  exit. Aavishkaar group of funds manage and advise USD 200 million of capital being invested in very early stage enterprises across India, South and South East Asia with a specific purpose to create value for underserved segments of the population while generating commercial returns for investors. The exits have been realized by the Aavishkaar Goodwell I and Aavishkaar Goodwell II funds managed in partnership with Goodwell Investments, an international investment firm that has pioneered a partnership approach to incubating early stage impact funds together with local investment teams.

Speaking about the investment thesis & the exit, Sushma Kaushik, Principal at Aavishkaar, said “Our journey with Suryoday has been a very exciting and fruitful one. We highly respect Baskar Babu, Suryoday promoter ability in converting a nascent idea into a flourishing institution and in his leadership through the growth phase and now navigating the transformation into the Small Finance Bank. This is one of the best run financial service institution and we hope the future as a Small Finance Bank would continue to be exceptional. We wish Baskar and the team the very best in their next phase of growth”.

Wim van der Beek, co-managing partner of the Aavishkaar Goodwell funds adds: “With a loyal client base, solid organization, strong team and a fresh capital raise of USD 15m (₹ 100 Cr) – which our exit happened in parallel to – Suryoday is ready to grow into a next generation inclusive bank that serves a broader underserved client base with a much wider range of financial products. The investor group backing Suryoday is excellent and will be able to provide the support they need in this next stage. We are proud to have been part of their journey thus far.”

Reflecting on the journey, R Baskar Babu, Co-founder & CEO of Suryoday said, “Our association with Aavishkaar Goodwell began even before we started the company and has been mutually rewarding. We thank Vineet Rai and the Aavishkaar Goodwell team for their trust in us and appreciate their role in helping us evolve into a respectable player in Financial Inclusion. We are delighted that we could benefit from their continuous support and are very happy that they are making a profitable exit as their continued focus is in investing at an early stage helping the company grow to a meaningful size and is moving on to benefit many other start-ups. We wish them the very best in seeding many more socially impactful companies around the world.”