Aavishkaar Capital brings private credit strategy for emerging corporates to Southeast Asia

In an exclusive discussion, Abhishek Mittal, Partner at Aavishkaar Capital, a sponsor of DealStreetAsia’s Indonesia PE-VC Summit 2025, elaborates on the firm’s plans to support small businesses across the region.

The future of investment in Southeast Asia lies in private credit, and EM focused private capital firm Aavishkaar Capital sees significant opportunity for expanding its investment portfolio in the region.

Partner Abhishek Mittal sees growing demand for alternative financing solutions among startups and SMEs, as founders seek non-dilutive sources of capital. “Private credit is a viable alternative to raising equity capital, especially for businesses that have proven their models and are no longer burning cash and have positive operating cashflows to support self-liquidating structured credit solutions.”

“We are complementing equity, not competing with it,” Mittal explained. Structured Credit becomes essential for businesses as the businesses mature.  Such businesses usually include those fundraising for Series C & beyond and with business models with demonstrated positive cashflows, typically still seeking growth capital. This not only helps founders avoid excessive dilution and maintain control, but also helps existing equity investors make leveraged returns. “Private Credit is the future for the next decade across emerging Asia and would become the growth capital of choice for emerging corporates.”

Based in India, with offices in Mumbai, Delhi, as well as Nairobi in Kenya, Aavishkaar Capital has invested in early growth-stage enterprises since 2001, and has over half-a-billion dollars in assets under management. It is backed by global institutional investors, including pension funds and financial institutions, and plans to continue raising domestic capital for its funds, particularly in India.

Global footprint

Aavishkaar Capital manages 8 funds, six focused on India equity, one on Southeast Asia, and another, led by Mittal, is dedicated to the Global South, covering Africa and Asia with a particular focus on private credit.

In 2022, the firm launched its structured credit strategy, a $220 million vehicle in partnership with German state-owned investment and development bank KfW, to provide flexible capital solutions for mid-cap businesses operating in global supply chains across Africa and Asia.

The private credit strategy in Southeast Asia marks a significant milestone in the firm’s expansion. “We are probably the first India-headquartered fund to venture out and set up global funds practice focused both on Africa and Emerging Asia,” said Mittal, reflecting on the firm’s international journey.

Through its structured credit fund, Aavishkaar Capital plans to allocate at between USD 50 to 60 million across the SEA region, with at least 40% of it going to Indonesia. Mittal aims to build a team on the ground and make at least one investment in both Indonesia and Vietnam within 2025, with a potential focus on the Philippines, Thailand, and Cambodia in the future.

Focus on sustainability makes businesses resilient driving long-term growth

Although Aavishkaar Capital’s investments are typically sector-agnostic, climate-related ventures are increasingly becoming central to its portfolio. It has made notable investments in climate-smart technologies, recycling solutions, including an early-stage investment in green hydrogen.

Portfolio companies for the global fund include India’s leading agri-tech Agrostar with farm to fork capabilities with significant export of fresh produce to global markets; Jumps Auto Industries – an Indian auto ancillary company, Privam Nuts a macadamia nut processing company in Kenya, Hela Apparels and Balaji Group, textile manufacturing companies in East Africa; and an on-lending partnership with Midland Bank to support textile sector supply chain players in Bangladesh.

The fund prioritizes businesses that are operating in global supply chains and are committed to producing their products and services in a sustainable and inclusive manner, thereby minimizing their adverse footprint on the environment and the society with business practices at par with global players operating in developed markets.

Investments have to pass rigorous impact and business resilience screenings while also delivering market returns for investors. Aavishkaar Capital views focus on sustainability and inclusion as a crucial driver of business resilience and long-term success. Mittal noted that increasing consumer demand for responsibly produced goods and services, ranging from sustainable textiles to energy-efficient manufacturing, drives the firm’s investments in this space.

Mittal believes that small to mid-sized businesses involved in the global supply chain need to be supported to meet the growing demand for sustainable products, particularly in developed markets. “The consumer today is willing to buy more of a product that is sustainably produced,” he said. And, these companies often lack access to flexible and responsive capital, which is where Aavishkaar Capital’s credit-focused investments come into play.

“We like businesses which are part of the export value chain and have high quality B2B clientele with very high quality earnings. These businesses are not necessarily hyper-growth businesses typically preferred by venture capital and venture debt investors but are generally steady growth businesses with very high-quality cash flows,” Mittal said.

Beyond investments

In addition to capital, Aavishkaar Capital offers technical assistance to its portfolio companies. This grant capital is used to support capacity building and fund projects that help businesses invest in long term capabilities.

Aavishkaar Capital’s Technical Assistance Facility is a USD2 million grant fund, which can be used to support capacity building projects. “We can fund feasibility studies, capacity building, or fund subject matter experts to support the business.” Mittal said. “Beyond supporting the portfolio, we can use our technical assistance to support the broader ecosystem, not just our portfolio companies,” Mittal explained, emphasizing the firm’s commitment to fostering sustainable business practices beyond its own investments.

Ultimately, Mittal emphasized, Aavishkaar Capital is well-positioned to support the region’s evolving small business ecosystem, driving sustainable growth while maintaining a focus on impact and financial returns.