TPG-linked impact fund buys Indian dairy stake

The $50m investment is the second transaction from The Rise Find, TPG Growth’s $2bn global impact fund.

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

The Rise Fund purchased its stake in Dolda from Proterra Investment Partners, a Proterra spokesperson confirmed to Private Equity International sister title Agri Investor. Proterra had reportedly paid 1.1 billion rupees ($17.1 million; €15.5 million) for a 23 percent of Dolda 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, Dolda 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 monthly progress in providing farmers supplying Dolda with more predictable income. Among factors to be measured are improvements in price, spoilage 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 Dolda 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.