India is often referred to as a laboratory for social entrepreneurship, where innovation is brewing, and new products and services are being dished out thick and fast. Things are looking up after the doom and gloom post the 2007-08 recession and the micro-finance controversy that rocked the industry in 2010.
There are a lot of social enterprise focused VCs that are chasing deals at present. The trend in social investing started in the mid-2000s with VCs like Acumen Fund and Aavishkaar Venture Fund, and more have followed suit like Omidyar Network, Khosla Labs and India Social Fund (ISF). Now, there maybe close to a billion dollars chasing SE investment. These social VCs have been buoyed by SEs that are growing in scale and revenues, and even providing successful exits. Aavishkaar, which was started in 2001, has had a few exits, these include Rangsutra, an artisan-owned handicrafts company, Servals Automation, a rural energy solutions provider and Shree Kamdhenu Electronics, an electronic milk collection services company. According to the Intellecap SE study, most of the investments are bunched up around agriculture, education, healthcare and energy.
The industry requires talent; and that is being supplied by institutions, like the Tata Institute of Social Sciences (TISS), some of the IIMs, ISB and many other B-schools. The government too has recognized the huge potential SEs have in tackling age-old problems related to education, healthcare, agriculture, energy, water and sanitation. In January, 2013, Sam Pitroda, chairman for the National Innovation Council, announced a $1 billion fund to invest in enterprises that tackle problems at bottom of the pyramid.
But more is needed: attracting top talent, encouraging the growth of impact investing as an investment vehicle, an exchange purely for SEs to raise capital like Singapore’s IIX and less regulation and more incentives from the government.
From its first baby steps, the SE industry is ready for its next jump into adolescence and adulthood.
Billionbulbs will track this journey.