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

Monday, February 4, 2019

By Rahul Sachitanand

The premise and promise of impact investing has always been clear. This is capital that avowedly cares about the triple bottomline— people, planet and profits. The idea is that there are opportunities in the social sector and towards the bottom of the income pyramid that needs innovation in the way the business models are funded.

The traditional venture capital expectation of high and quick returns, the argument goes, are singularly unsuited when you are not just building a business,but often willing a new sector into existence, working in unorganized segments and rural areas. It takes time, patience, networks and rolodex of a different nature, links with the government and regulators, and so on.

But some two decades after the pioneer fund Aavishkaar made the first Indian deals in the space, while the players and money in the space have grown by leaps and bounds, the industry appears to suffer from an identity crisis.