Deals

TPG-linked impact fund buys Indian dairy stake

The $50m investment marks the debut agri investment and second investment overall from The Rise Find, TPG Growth’s $2bn global impact fund.

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PUSHKAR, INDIA - OCTOBER 22: A Rajasthani tribal man wearing traditional colorful turban and brings his flock of sheeps to the annual Pushkar Cattle Fair on October 22, 2012 in Pushkar, Rajasthan, India.

In its inaugural agricultural investment, TPG Growth-affiliate The Rise Fund has made a $50 million investment in Dodla Dairy, a Hyderabad, India-based fresh dairy product provider.

The Rise Fund purchased its stake in Dodla from Proterra Investment Partners, a Proterra spokesperson confirmed to Agri Investor. Proterra had reportedly paid 1.1 billion rupees ($17.1 million; €15.5 million) for a 23 percent stake in Dodla in 2012, but the spokesperson declined to confirm those figures.

Joy Basu, The Rise Fund’s impact sector lead for food & agriculture, told Agri Investor that the investment was motivated by the growth potential stemming from the Indian middle class’s increasing demand for formalized food markets, as well as research advocating for contract farming as a key method for raising farmer income.

Founded in 1998, Dodla procures milk from 250,000 smallholder farmers that is processed into fresh packaged liquid milk and other products including curd, butter and ghee. The company maintains nine processing centers, a large network of refrigeration facilities and 16 sales offices that distribute its products to 50,000 retail outlets across 66 regions in South India.

Basu said The Rise Fund is in the process of finalizing a set of metrics that will be used to track progress in providing farmers supplying Dodla with more predictable income. Among factors to be measured are improvements in and access to inputs, financing and infrastructure improvements.

The Rise Fund is an affiliate of TPG Growth that pursues investments with measurable positive social impact as well as competitive returns.

Bill McGlashan, TPG Growth founder and chief executive of The Rise Fund, noted in a statement that Dodla is helping to create links in the food value chain that can “help to significantly reduce rural poverty.”

Launched last year and understood to have a target of $2 billion, the fund plans to pursue investments in the information, education, finance, energy, infrastructure and healthcare sectors, in addition to agriculture.

The fund’s first deal came last week, when it announced it had invested $120 million in EverFi, a Washington, DC-headquartered subscription-based digital learning platform.