“A normal VC would not understand a free or a subsidized service. That kind of mindset is not there with them. Profitability is their prime target,” said Sweta Mangal, chief executive, Dial 1298 for Ambulance, which has been funded by Acumen Fund India.
Experts say that inclusion of the financial markets for social uplift is a good move, though the success of these ventures will set their pace for the future. So far, social ventures have had the backing of the government, philanthropists, or not-for-profit trusts. The government’s efforts, though extensive in reach, have suffered initiatives from a lack of focus and execution in the past.
Initiatives by NGOs and a group of people are intensive but not extensive, said D. Rajasekhar, professor and head, Centre for Decentralisation and Development, Institute for Social and Economic Change, Bangalore. “Financial viability of such endeavours has (yet) to be seen as these funds will need some degree of returns,” he says.
Meanwhile, these funds also face issues when it comes to raising funds, due to the very nature of their business profile. Aaviskaar, which recently closed a fund, said investors are turning increasingly risk averse and are not too inclined to invest. “We have 50 times more difficulties in raising fund than anyone else. Till the time we create returns, investors’ hesitation will continue,” said Rai.