International Finance Corporation (IFC) is planning to invest around $20 million in Endiya Partners Fund and Zodius Capital-backed Onsitego.
In Endiya Partners Fund II, the World Bank's investment arm will invest an equity investment of upto $10 million.
Endiya Partners Fund II is an India domiciled Category II Alternate Investment Fund (AIF). The fund focuses primarily on seed and pre-Series A investments in Indian technology and technology-enabled companies across healthcare, enterprise technology solutions and consumer services sectors.
The fund will invest in companies with disruptive business models that bring innovative solutions to market, and drive economic growth while also expanding services to under served segments of the population. These companies increase competitiveness in sectors that are characterised by low productivity, poor efficiency, low competition and weak supply chains, said IFC.
VC investment volumes in India are markedly lower than VC volumes in advanced economies and approximately one eighth of China.
The investment will increase access to early-stage venture capital for Indian startups, founded by first-generation entrepreneurs. The fund is expected to focus on investing in unique intellectual property-led startups and scaling these startups.
Investment from a lifecycle investor such as the IFC will position the fund to have better access to co-investment and follow-on capital for its investee companies, which are particularly valuable for early-stage businesses seeking to scale, IFC added.
Endiya Partners had hit the final close of its debut fund at Rs 175 crore (around $26 million) in early-2017.
IFC is also considering an equity investment in Onsite Electro Services Pvt. Ltd. (Onsitego), a provider of extended warranty and after-sales services for appliances and consumer electronics (ACE). Onsitego has recently launched annual maintenance contract (AMC) services for appliances.
IFC's investment will support Onsitego to expand its product distribution and service delivery channels, so as to reach, educate and provide ACE protection for a broader consumer base in India, will help to develop and scale its preventative maintenance services, so as to extend its protection coverage beyond newly-bought ACEs.
As an investor with a strong footprint in financial technology across emerging markets, IFC will be providing non-financial additionality in the form of knowledge, innovation and capacity building, by actively supporting the company's management on strategic decisions as the company continues to grow and expand.