Unitus Seed Fund, which invests in for-profit startups in India to help people at the bottom of the economic pyramid access basic necessities, has raised its second fund of $3.3 million. The new fund, called Unitus Seed Fund India, has been approved by India’s market watchdog SEBI to raise up to $9-12 million from local investors, making it the first such seed-stage impact fund in the country.
The new fund comes at a time when India’s wealthy, first generation technology entrepreneurs and senior executives are actively seeking ways to contribute to their society.
Unitus announced that former Microsoft India chairman Ravi Venkatesan along with former Asia head of Khosla Venture Advisory Services, Atul Bindal, are joining the new India fund to oversee its investment decisions. Among the fund’s founding investors are ‘Bala’ V. Balakrishnan, board member of the country’s second biggest software company Infosys, T.V. Mohandas Pai (co-founder of Aarin Capital) and Ranjan Pai (CEO of Manipal Education and Medical Group).
Since January this year, Unitus Seed Fund has invested in nine startups in the areas of healthcare, education and livelihood.
Engineers in India are making a solid living but exist in a parallel world where millions live on less than $5 a day. Clearly, there is an opportunity to combine all India’s engineering and entrepreneurial talent to solve the problems of providing affordable education, healthcare and other technology-enabled services.
Unitus is not the only fund helping startups fight poverty in India. Vinod Khosla’s Khosla Impact Fund, has been investing in Indian startups focused on solving the local problems. Last year, Vinod Khosla established Khosla Labs, a technology product incubator based in India’s tech capital Bangalore, to create products that will help the country’s poor access formal banking services and even empower smaller grocery shops with software solutions to compete better with large, organized retailers.
Will Poole, co-founder and managing partner of Unitus Seed Fund, said by involving domestic investors in backing these startups, a lot more could be achieved. Unitus defines this market as the base of the economic pyramid, or BoP, in India.
“We anticipate investing in up to 40 of these BoP Startups over the next 4 years. There is a dearth of seed capital in this segment of the market, making the investment opportunities very attractive,” Poole said.
Unitus also announced two fresh investments along with the new fund. They are:
- GoCoop Solutions – provides a social marketplace for co-operatives and community-based enterprises to list and sell their products online.
- Welcare Health Systems – leverages technology to provide low-cost eye screening services
Srikrishna Ramamoorthy, partner at Unitus Seed Fund India said he had looked at 200 investment opportunities in this space since January this year. Another trigger for a growing number of startups aiming to solve India’s problems is the country’s residents’ identity database project called Aadhar, which is inviting entrepreneurs to build applications in the areas of mobile payments and consumer retail.