NB Financial Health

Thursday
November 5
2015

James Militzer

The Impact of Tech: Sandhya Hegde of Khosla Impact Fund discusses how high-tech solutions can transform lives at the BoP

Khosla Impact Fund is an early stage equity fund that focuses on tech startups that help improve the standard of living at the BoP around the world, with a particular focus on India, and East and West Africa. According to Sandhya Hegde, a general partner at the fund, Khosla looks for startups that “can reach millions of people over time, that are making core services in health care, education, and energy more affordable, and that are creating a larger number of digital jobs and improving inequity in the global standard of living.”

Why – other than the obvious influence of its founder, tech luminary Vinod Khosla – did Khosla Impact choose to help the poor through technology? “For us, technology represents a scalable tool,” says Hegde. “More than anything else, it’s a tool that can amplify the impact of whatever the product or solution is.” As an example, she cites Khosla investee BBoxx which, she says, is setting up “vertically integrated solar systems for off-grid households in Kenya, Uganda, Rwanda, and even as far as the Congo. They have completely remotely monitored systems and mobile money payment platforms that allow them to collect digital data, and have reached over 60,000 households in very remote parts of Africa already.”

Unsurprisingly, mobile tools are also heavily featured among Khosla’s other investees. As Hegde puts it, “There are now more than 4 billion mobile phones in the world – that’s the one thing that has really transcended the boundaries of nations and socioeconomic classes, and has become a tool that you can reliably assume that most people have.” Leveraging this tool, she says, can greatly boost efficiency in many sectors – but this isn’t the only motivating factor driving Khosla’s investments. Among the features of an ideal investee, the fund’s website lists the ability to “enable radically new unit economics that could destroy a monopoly, or obviate traditional means of resource allocation.”

In describing this goal, Hegde references dominant companies and products like Western Union and Safaricom’s M-PESA in Kenya. “At a certain point, they stop investing in growth. They keep the pricing of their product pretty high, and they often stop going to the remote corners of the community because the infrastructure investment required is pretty high, and the company is already doing so well where they are that they don’t need to invest. … We look for the businesses that can actually challenge large, lazy monopolies, and push them to also compete for markets.”

In this interview, recorded at the recent SOCAP15 conference, Hegde discusses the sectors and social issues that lend themselves to tech solutions, how Khosla works to help grow the ecosystem for their investees, and other issues related to the impact of tech on the developing world.

 

James Militzer is the editor of NextBillion Financial Innovation.

 

Categories
Investing, Technology
Tags
impact investing, invention, SOCAP, technology, video