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Lok Capital, an impact investment venture capital fund, has announced the first close of ₹270 crore ($40.5 million) of its third fund. Apart from existing investors – CDC Group plc of the UK, FMO of the Netherlands and Proparco of France – TIAA Global Asset Management, a leading teachers’ pension fund in the US, has put in money in this round. Lok plans to raise $100 million (₹670 crore) in the third fund.
Along with the fund raise, Lok will also change its investment strategy. It will hereafter invest in growth-stage ventures with average cheques of $5-6 million, against the early-stage investment that it did so far with its first two funds. Lok will also focus on three sectors – financial services, healthcare and agriculture – and not look at the education and renewable energy sectors as it did in the second fund. Lok invested in two education start-ups from the second funds, but feels that the unit economics does not work out in these two sectors.
From being the first institutional investor in the first two rounds, Lok will now come in the Series B or Series C stages, when the ventures have already money from outside investors. It will hope to pick up a significant minority stake in the companies, of 20-30 per cent.
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