According to Omidyar Network’s (ON) India head, Jayant Sinha for India’s fledgling social entrepreneurship industry, the problem is not the availability of capital, but the dearth of quality social enterprises (socents) to be invested in. “Capital is available in plenty, what we need is high-quality enterprises to invest in where the founders have the right credentials,” said Sinha at the sidelines of a press conference in Bangalore to announce a new investment in Kolkata-based iMerit Technology Services, an IT enabled services company that trains and hires youth from small towns and cities.
ON founded by eBay founder Pierre Omidyar’s is a venture philanthropic fund, that has invested about $113 million (roughly Rs 612 crore), in 35 companies in India, since its inception in 2010. “At the rate we are investing we should invest another $100-200 million in the next 3-5 years,” added Sinha.
ON, which has a sector-based approach to impact investing, mainly invests in social enterprises (socents) or non-profits. In India, 45 per cent of its investments have been into non-profits, while the remainder has been pumped into socents. The sectors that ON invests are consumer internet and mobile, entrepreneurship, financial inclusion, government transparency and traditional philanthropy.
Non-profit investees include Bangalore-based Akshara Foundation, a non-profit that focuses on elementary education, which received a $950,000 grant last year and Anudip Foundation, which focuses on creating livelihoods for disadvantaged youth. ON’s socent portfolio include energy platform company Agni Energy, classifieds firm Quikr, and Vistaar Technologies, which promotes financial inclusion.
Things are hotting up in the social enterprise (socent) investment space in India. Other venture funds with a focus on socents include Khosla Labs, Gray Matters Capital, Aavishkaar, Acumen Fund and Oasis Fund. Back-of-the-envelope calculations suggest that there is close a billion dollars to be invested in socents. The Indian government has plans to invest another $1 billion.