India, Startups, VC

The Closing Gap in Indian Seed Investing

(This is reposted with edits from vilcap.com, where Ross is making bold predictions about the upcoming year in impact investing and social enterprise)

When First Light began two and a half years ago, we had one goal: to fill the gap in funding between family members and social venture funds. Social enterprises were popping up on the promise of VC-like funding, but found that few funders were willing to take the sort of bet on young companies that weren’t quite ready for the Acumens and Aavishkaars of the world.

Today, the market for seed-funding for social enterprises is heating up fast–especially in India. Two large microfinance organizations are building seed funds, as is one design firm and another social enterprise incubator.  Unitus has launched its own seed fund, CIIE’s Infuse Fund targets seed cleantech investments, Cambodia-based Insitor has partnered with Breathe India Ventures to make (late-ish) seed-stage investments in India, and both Ennovent and Intellicap are building up their own networks of Indian angels. Even Acumen has begun to make investment below the $300,000 mark in India. Drop the social bit, and the field gets even more crowded: Mumbai Angels leads a growing pack of city-based angel networks, and even Dave McClure and company are looking to invest in Indian startups.

So what does this mean? A /ton/ of fundraising; increased competition for deals and higher valuations, for starters. And a general investor shakedown as entrepreneurs, flush with options, begin to get more picky about which investors and funds they work with. Hopefully, it will convince more would-be entrepreneurs to take the leap into starting their own company, knowing that one the rungs of social enterprise finance is snapping in place.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s