Chiratae Ventures International Fund IV

• Direct: Providing seed to later stage capital to approximately 40 early-stage companies, enabling their growth and generating direct employment.
• Direct: Through investments in telemedicine, new medical products (c. 15 per cent in Fund III).
• Direct: Through investments in technology to provide affordable access to goods and services, such as finance (c. 20 per cent in Fund III).

Economic enabler: Chiratae will invest in tech-enabled platforms that connect local workforce and suppliers to markets (c. 10 per cent of portfolio in Fund III) as well as to resources and inputs required to meet that demand.

Pan-India - mainly Tier 1 and Tier 2 cities, some companies may also reach populations in smaller cities and rural areas.

• Direct employees are likely to be relatively high income.
• Tech platforms are likely to reach lower income segments of the workforce and small-scale entrepreneurs e.g. drivers (BlowHorn), farmers (Agrostar, ULink).
• Employees and microentrepreneurs reached through providing affordable access to good and services like finance: middle and low-income e.g. Credit Mantri (Fund II) targets borrowers with negative or no credit history; EasySalary targets blue and grey collar workers.

Pan-India - mainly Tier 1 and Tier 2 cities, some companies may also reach populations in smaller cities and rural areas.

Likely middle income, although some companies may reach lower-income segments.

• The venture capital model implies the potential for large scale, over a long-term horizon. If successful, companies have the ambition to reach millions; however, this is likely to only come from a subset of companies.
• Employees and microentrepreneurs: Fund I-III companies have created 58,000 jobs and employ over 60,000 people. Platforms have the ambition to reach hundreds of thousands, e.g. intra-city logistics platform Blowhorn has 25,000 active drivers. Credit Mantri has improved credit scores for 1.3 million customers and helped them access $90 million worth of loans.
• Consumers: e.g. Onco.com caters to over 25,000 cancer patients; Forus Health provides affordable eye check-up services to tens of thousands of patients daily.

• Employees and microentrepreneurs: Quality of employment and improvement in economic opportunities will be highly variable. Impact is likely to be deeper for low-skilled labour and populations in rural areas, e.g. Blowhorn drivers report an average 25 per cent increase in earnings.
• Consumers: Variable depending on the nature of goods and services provided and the population reached.

• Financial additionality: Our capital will help the fund near its target size ($275 million) and complete additional investments, increasing the fund’s impact
• Value additionality: Enhancement of environmental, social and business integrity practices. Enrolment in the 2X Challenge for women’s economic empowerment.
• Mobilisation: Our commitment unlocks an additional $5 million from other investors, namely the IFC, AEROW SMA I L.P, and SA-EL Asia I S.C.S

2.0-2.2

Market context: In India, only 0.3 per cent of new businesses that are launched are financed by venture capital vs 0.6 per cent in the US.

Alignment Risk

• Relates to the risk that follow-on capital is allocated to companies that are not aligned to our impact ambition. This is not a risk that we can mitigate as decisions will purely be driven by commercial performance, However, we will use our venture capital scale-up programme to allocate additional capital to the most impactful businesses and support their growth in instances where the fund manager may have more limited appetite or dry powder.

Execution Risk

• Relates to the risk that businesses will fail to scale and deliver on the expected impact. This is an inherent risk to the venture capital model which is mitigated by selecting an experienced fund manager.

Unexpected Impact Risk

• by cutting out intermediaries and / or corporate functions, some investees will reduce existing jobs, which is likely to negatively impact more vulnerable and less skilled segments of the population. This risk cannot be mitigated.