C4D Asia Fund invests in SMEs in India, Indonesia and the Philippines

C4D Partners is a Netherlands-based impact investment fund manager with experienced local teams. The team launched the C4D Asia Fund in December 2018 with USD30M out of USD50M secured in the Fund’s first closing.

With a launching portfolio of USD 9m, the Fund will build upon its investments in scalable and impactful SMEs in Indonesia, India and the Philippines. The Fund offers capital at conditions that consider financial risk, business case resiliency, and impact potential.

SMEs are financed through equity and hybrid financing such as convertible loans, revenue share loans, etc., which offer appropriate risk capital while allowing fund investors to benefit from promising financial upsides. Invested SMEs are strengthened by the separately structured and financed Portfolio Support Program Asia that provides client-driven business development support.

Fund investors profit from return enhancements such as preferential return and downside protection provided by sponsor and launching investor, ICCO Cooperation.

The C4D Asia Fund utilizes a variety of financial tools across India, Indonesia, and the Philippines.

In India, C4D Fund uses equity for initial investments of USD200K up to USD1M for preseries A or series A enterprises. Reserve capital (up to USD4M) is available to invest in company growth and subsequent investment rounds. As an active Board member, C4D Partners provides additional support and adds value to portfolio companies.

In Indonesia and the Philippines, C4D Fund uses primarily hybrid financing. As the ecosystem of impact investing is still in its early stages, the Fund applies other financing instruments than conventional equity which requires a clear exit strategy. The Fund structures hybrid finance instruments with a performance-linked upside that liquidate over time and are tailored to the company cash flow projections. Examples of these instruments include convertible debt, debt with revenue share, or debt with other performance-linked kickers. To access this type of finance, an SME must provide robust cash flow projections.

Discover more about C4D Asia Fund’s scheme and the learnings, risks and impact measurement they’re already using to assess this innovative model in our latest case study.