NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, February 22, 2017

Are venture funds missing the wood for the trees in India? Even while there is talk of a suspected slowdown in startup funding, the amount of money sloshing around is large. But how much of an impact is it having, and why is the average Indian not being affected by it? For that, you have to pause and take another look. What do you see?

I see a lot of capital getting ploughed into companies that help us order food, use a directory service, book a cab, or provide relocation services. I see some of the best talent in our country working on solutions that make more people click on ads, but I hardly see funding in areas that can actually touch a billion people, create economic growth, lift India out of mediocrity and yet, make huge returns — just the way any investor likes it.

And then we complain about the lack of civic facilities, poor supply-side management, lax governance, reeking garbage dumps, and many other such things. We even complain about the lack of basic financial and strategic support to our micro and small enterprises.

Sure, one needs to maximise returns on one’s fund, but there are several other avenues. Impact investing is one of them. The potential of social businesses in an economy like ours has huge implications. The scale is pretty evident and the market gaps are humongous.