British International Investment

3one4 Capital IFSC Fund

South Asia

3one4 Fund IV is an early-stage venture fund investing in tech and tech-enabled businesses in India.

Our investment

Description of the investment.

This investment is part of our strategy to (i) support the local entrepreneurial ecosystem in our markets in order to build new businesses which create jobs, and; (ii) provide us access to early-stage companies that have the potential to create transformational impact at scale.

We invested in 3one4 Fund IV, the successor fund to 3one4 Fund III, which we committed to in 2020.

The fund manager will focus on sectors including SME digitisation, fintech, software as a service, and digital health. While 3one4 has a broad focus in terms of sector, the fund manager will focus on our key impact theme, as seen in Fund III, such as (i) climate tech – investments in Yulu, Exponent, Fasal; (ii) gender – investments in Salt, Binks, and; (iii) inclusion – investments in Rozana, WeRize and Dozee.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Improve economic productivity (for B2B businesses) and economic opportunities and quality of life (for B2C clients) through investments in technology-led and innovative companies. In addition, we will create economic opportunities through job creation.

How?

How?

We expect a substantial proportion of investee companies to be aligned with our impact objectives (e.g. healthtech, fintech, mobility, food and agriculture), and that these companies will create jobs through scaling. In addition, we expect the majority of investments to be economic enablers, with positive knock-on effects.

Who?

Stakeholder Geography Characteristics
Variable depending on nature of businesses (employees, consumers and/or suppliers)

India

Variable depending on nature of businesses, but we will focus impact monitoring on businesses with substantial low-income reach, targeting underserved populations and/or innovating in the climate space.

Employees of fund investee companies

India

Employees are likely to be mostly skilled, belonging to middle-income groups, although there should be some semi-skilled, lower-income employees as well.

How much?

Scale Depth/Duration

Variable, but track record from previous funds demonstrates substantial scale across portfolio: BetterPlace (BII co-investment): 550 enterprise customers/3.5 million jobs processed; Yulu: 275,000 electric vehicle rides/month; Open: 1 million SME customers; Licious: 33,000 farmers integrated into supply chain. Fund II and III companies employ over 9,000 people.

Depth: Variable depending on the nature of the business, although some existing cases of meaningful depth: BetterPlace has seen a 2-3x increase in ‘trust quotient’ and 25-45 per cent increase in wages over three years for surveyed workers; Begin shows 74 per cent improvement in reading scores through early learning education programmes.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Our capital will help the fund achieve its target size and allow it to make follow on investments, increasing its scale of impact.

  • Value additionality: We will continue to provide some value additionality, although it will not be substantial.

Risk

Alignment Risk

Relates to the risk that capital is allocated to companies that are not aligned to our impact objectives especially on inclusion. We will use our Venture Capital Scale-Up programme to allocate additional capital to what we believe are the most impactful businesses.

Evidence Risk

Relates to the likelihood that high quality impact data will be unavailable to assess depth of impact. We will explore ways of strengthening impact data collection and reporting with the manager.

Execution Risk

Relates to the risk that businesses will fail to scale and therefore deliver expected impact. These are inherent risks to the venture capital model, which is mitigated by selecting an experienced fund manager.

Impact score

Impact score (at point of investment)

The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. You can find out more here.

The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party.

6

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We have supported the manager to build their E&S capacity and management systems.

Environmental and social risk

Low

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    First published

    When the investment was first published on the website database.

    :
    March 2024
    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D6110
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Fund
    Start date :
    December 2023
    Amount :
    $10m
    Currency of investment :
    USD
    Fund Manager:
    3one4Capital Advisors LLP
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India
    2X Gender Finance

    Indicates whether the investment is ‘2X qualified’ using the 2X Challenge criteria. You can find out more here. It only applies to investments made from 2018 onwards, when the 2X Challenge was first launched.

    :
    Fully qualified

Subscribe to receive our latest news and updates