Yes, Venture Capitalists across the globe are now chasing the projects of and for the low and middle class consumer segment in India. Venture capitalists see this segment as the future for making big money. Take the example of Mightylight’s project, which provides $50 solar powered lights that replace the kerosene lamps used by majority of poor people in Indian Villages?
The villagers for whom these have been installed are thrilled due to non-recurring costs and savings.
MightyLight is the brainchild of New Delhi-based Cosmos Ignite Innovations, a Stanford University-incubated startup by Matthew Scott and Amit Chugh that aims to provide simple products for the world’s poorest people. This project is backed by biggies like Vinod Khosla, a veteran Silicon Valley venture capitalist.
Until recently, the Venture Capitalists were only interested in funding Tech startups in developed countries and urban cities. But now, the VCs are suddenly flocking to a territory that was disliked and shunned by many till now.
The Venture Capitalists such as US based Matrix Partners are looking at funding projects in consumer services, health care, financial services, travel, media, and entertainment sector in countries like India. The VCs have plenty of opportunities here with very low competition unlike the technology sector where even they are chasing projects with money in their hands.
There have been slew of VC funding recently in such projects – like Sequoia Capital India’s investment of $11.5 million in SKS Microfinance – a company based in Hyderabad who provides microfinance solutions to women clients in India. It offers mid term, individual, income generating, and emergency loan products, as well as term life insurance schemes.
Others like Clearstone Venture Partners, based in Santa Monica, Calif., have put $5 million into DigiBee Microsystems, who are into selling low-end mobile phones to poor Indians.Â The investments in such kind of projects were unheard of earlier, but VCs see the large poor and lower middle class consumers in India as one of the most attractive markets worldwide.
The other two California Venture capital funds Walden International and New Enterprise Associates are planning to invest $5 million in Novatium, a Chennai-based company that has developed a $100 personal computer which is targeted for the poor but educated people in India.
I have been part of many entrepreneurial forums, andÂ am seeingÂ plenty of new innovative ideas and projects coming up. VCs are chasing them with money, with someÂ entrepreneursÂ even refusing to get their project funded.
This is an amazing time to start a project; it is just matter of time before you will find VCs chasing to give you money!