IMPACTASSETS 50™
An Annual Showcase of Impact Investment Fund Managers
ImpactAssets 50
An Annual Showcase of Impact Investment Fund Managers
Lok Capital
Climate Change
Financial and Economic Inclusion
Food Systems and AgricultureFirm Overview
Lok Capital is a pioneering India-based VC fund established in 2004. Lok generates above market returns via investments into innovative tech-enabled enterprises that address pressing social and environmental challenges at scale. "Lok" means "people" in Sanskrit and Lok believes in making capital work for the benefit of people. Lok’s success comes from backing strong founders who share the alignment of impact, deep diligence of on ground operations, active involvement post investment to create value and discipline on exits. Lok Capital has successfully deployed and returned 3 funds and is currently investing from its fourth fund into financial inclusion, fin-tech, health-tech, food & agri-tech and climate-tech & sustainability solutions. Lok IV is a 2X qualified fund and SFDR Article 9 compliant. Lok's founding team members were also the founding members of the India Impact Investors Council. Lok is also an Investor Committee member of the Global Impact Investors Network (GIIN).
Years of Operation: 10 years or more
% of Capital from Top 3 Investors: 50% – 99%
Lok makes early-growth stage VC / PE investments into fast growing impact sectors of financial inclusion, fin-tech, health-tech, food & agri-tech and climate-tech & sustainability in India. Lok has been able to achieve superior financial returns along with generating impact by deep diligence, founder referencing and active portfolio management.
Lok was incorporated to improve outcomes for the underserved segments in India, and identify equity investments into sound business models as a sustainable manner of achieving impact at scale. Lok places a strong emphasis on selecting good quality founders – not only in terms of business acumen and execution capabilities, but also on the intentionality for impact and operating with good governance systems. Our diligence and portfolio management process involves significant field visits and conversations with stakeholders on the ground. This helps us better understand risks and value creation opportunities to support the founders. Impact, ESG and climate risk management frameworks are deeply embedded into the investment management process. We have built a reputed name for ourselves in the niche in which we operate. More than 80% of our investments and more than 60% of our overall pipeline have been sourced through proprietary channels.
Lok has developed a unique positioning of taking a ‘growth/ PE style’ approach to early stage investing, which is demonstrated by a high proportion of profitable exits and an extremely low write off ratio compared to its peers. Lok has built proprietary channels of quality entrepreneurs and has a deep understanding of our focus sectors with a strong focus on governance, resulting in superior returns across three funds upwards of $25% IRR and with exits across IPOs, secondaries, M&As and buybacks. Insights from the field and engagement with portfolio not only helps contribute to the growth of investees, but also helps identify risks before they become damaging. Lok has an NPS of 82 amongst past portfolio companies surveyed anonymously, with 80% of founders we have worked with believing that Lok has improved the value of their business and 90% agreeing that Lok has improved impact objectives of their business models.
Investment Example
Lok Capital’s investment in SuperBottoms, a pioneering sustainable diaper brand, underscores our focus on impactful, gender-forward ventures. SuperBottoms produces reusable cloth diapers, with each diaper replacing up to 200 single-use plastic alternatives, reducing landfill waste and significantly lowering both greenhouse gas emissions and water consumption. We validated our thesis with a thorough Life Cycle Assessment (LCA), showing quantifiable reductions in greenhouse gas emissions and water utilization per diaper. SuperBottoms, a 2X Challenge-qualified investment, also aligns with our gender equity goals: it was founded by a female entrepreneur and boasts a workforce that is approximately 58% women. Through this investment, Lok Capital supports a brand that combines sustainability with social impact, creating quality products for eco-conscious parents and promoting gender inclusivity in the workplace.
Leadership and Team
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Venky Natarajan – Co Founder & Partner More Info
Venky is Co-founder and Managing Partner at Lok. For the last two decades, Venky has been involved with sectors including BFSI, healthcare, education and agriculture in India as an investor and as a member on boards of directors. He firmly believes in leveraging technology to drive inclusivity. Prior to Lok, Venky was based in the US, where he specialized in venture investments in the technology sector for Intel Capital. |
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Vishal Mehta – Co Founder & Partner More Info
Vishal is a Co-founder at Lok Capital and has been instrumental in building Lok as a premier private equity fund since 2004. He has also played a key role in fostering the Impact Investing space in India, including as founding executive director of the Impact Investing Council (IIC) and Advisory Board member of the Asian Venture Philanthropy Network (AVPN) in India. Prior to Lok, Vishal worked for a decade in the financial services and telecom sector in Asia, Europe and the US for companies like Capital One and Siemens. |
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Priyamvada Ramkumar – Partner Lok III & IC Member Lok IV More Info
Priyamvada has played a key role in shaping Lok’s financial inclusion strategy over the last decade. She led and managed investments in Lok’s second and third funds, across financial services and healthcare. She serves on the board of Veritas Finance and Mintifi Finance, and has participated as a board observer in several other investments. She is also a member of the investment committee of Lok’s fourth fund. Prior to Lok, she worked with Veda Corporate Advisors, a boutique investment bank, advising mid-market companies on their fund raising and M&A strategies. |
Financial Performance
Impact Performance
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Percentage of Total Assets Under
Management that are Impact Investments: |
100%
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Lok only evaluates investments that align with strong impact thesis. Before making an investment, we build a theory of change model to map potential impact pathways. As part of field visits, we evaluate ground level operations and understand the nature of beneficiaries that the company works with. We have developed a proprietary impact screening grid, and only invest in companies that satisfy it. We understand and analyse the specific contextual impact created by the Company so far and how the Company measures and improves upon it. The topics covered include demographics of beneficiaries, employee wellbeing, integrity and climate-preparedness among others. Our due diligence goes beyond standard legal and financial checks to include a comprehensive ESG assessment which involves screening against an exclusion list, EU’s DNSH criteria and then companies are categorized by ESG risk. This thorough approach allows us to identify meaningful opportunities for both financial return and social impact.
We’ve an ESG Management Standard and climate-framework which is applicable for all our investments based on industry best-practices, international guidelines and national laws. We have an internal dedicated ESG and Impact team that not only works on ESG-alignment and due diligence for our investees but also supports them formalise their impact management and measurement and build their internal systems and practices related to ESG, Business Integrity and Impact. We have also developed a proprietary corporate governance scorecard to evaluate companies across a range of criteria and outcomes of which are tracked on a quarterly basis at the Company-level. We have also set up a USD 1 mn technical assistance pool for companies to support emissions monitoring and mitigating activities, talent acquisition, new product development and impact enhancement. We also work with our portfolio to account for their GHG emissions and plan for mitigation, adaptation and resilience building to climate change.
Impact Tracking and Monitoring
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