ImpactAlpha, August 1 – The fund has raised $36.6 million after launching as Nepal’s first private equity and impact investing fund in 2014. It is backed by several development finance institutions, including FMO, Finnfund, the Development Bank of Austria, as well as the Dutch Good Growth Fund.
Raising investment capital in Nepal was a challenging endeavor for Dolma Fund Management, which manages the fund. Nepal ended a 10-year long conflict in the country in 2006, however “Nepal’s small population, low GDP per capita, and political instability are deterrents to investments in the country,” notes a 2016 GIIN report on impact investing in South Asia. Only a few investment players operate in Nepal’s market, including the World Bank, International Finance Corporation, and One to Watch, which announced plans for a $20 million second fund last year.
Dolma reached a $21 million first close in its first year fundraising, and intended to close the fund at $26 million in 2016. At that time, Nepal’s impact investing market was the second smallest market in South Asia, inching out Myanmar. Due to “growing demand for growth capital in Nepal,” Dolma decided to extend the final close, Dolma’s Tim Gocher told DealStreetAsia.
The fund will focus on investments in the renewable energy, agriculture, healthcare and tourism sectors. Dolma has so far made seven investments out of 10 to 11 planned deals. Its current portfolio includes energy venture Suri Khola Hydropower, health tech company Rhododendron Biotech, and online job and recruitment platform CloudFactory Group.
“All either substitute imports or drive exports at a time when Nepal’s trade deficit is growing,” Gocher said.