Bangalore: To outsiders, Vindhya e-Infomedia Pvt. Ltd appears to be just another business process outsourcing (BPO) company.

What sets the Bangalore-based company apart is the fact that 80% of its 500 employees comprise women below the poverty line and those with physical disabilities; some are blind, hearing-impaired or autistic.

“These are people who really want to prove themselves to society. We wanted to give them an opportunity," said Pavithra Y.S., founder and managing director of this BPO that provides services in 16 regional languages.

Abhishek Agrawal, former chief financial officer (CFO) of Swadhaar FinServe Pvt. Ltd, a microfinance firm that has been helping Vindhya take care of processing loan applications and customer care support for over three years, said he loved the company’s “unique approach to work with differently-abled".

He is also currently the country director of Accion—an international non-governmental organization (NGO) that helps social ventures around the globe—that recently invested about $1 million (around 6 crore) in Vindhya. Two years ago, Accion launched a $10 million global venture fund that has directly invested in seven social impact companies—enterprises that seek to espouse social causes and benefit specific, usually marginalized, communities.

Vindhya is just a case in point. Khosla Impact, a venture capital fund founded by Silicon Valley venture capitalist Vinod Khosla and Mark Straub, has invested in Indian start-ups like Babajob—a job portal for informal jobs like delivery boys, office helpers, drivers, cooks, maids and security guards.

Then there are Embrace Innovations, a provider of affordable healthcare devices; MokshaYug Access, a rural supply chain solutions firm; and Driptech, a provider of affordable drip irrigation for small farmers.

The last five years have seen a rise in the number of social impact start-ups coming out of India, many of them working on low margins and long gestation periods. Experts attribute the rise of such start-ups to their inability to get funded by mainstream capital ventures and the possibility of gaining some profit while addressing social issues.

“People have suddenly started to realize that there is an entire sector, where paying capacity is very less, remains untapped. This has called for many entrepreneurs to move into this space," said Osama Manzar, founder of Digital Empowerment Foundation (DEF), a not-for-profit organization that helps in digitization of information in rural India.

Take the case of Kolkata-based social impact start-up iMerit Technology Services Pvt. Ltd, which has designed a three-month-long course called MAST (Market Aligned Skills Training) to equip youth with necessary technical and soft skills to be able to accept competitive jobs.

“Our graduates, who are usually unemployed youth and marginalized women, start with salaries that are thrice their existing household incomes," said Joydeep Mukherji, vice-president and group CFO of iMerit that was founded in 2012. He said the business unit had provided employment to more than 20,000 people, “placed across over 500 Indian and international organizations".

According to Simmi Sareen, head of portfolio at IntelleGrow Finance, there are mainly two types of social impact start-ups—livelihood start-ups and life impact ones. “We have been trying to figure out what the meaning of social impact is and how to measure it, but each one has a different definition. Our definition is any company that can provide jobs to unemployment-ridden sectors and anything that has a direct positive impact on the less fortunate sectors of India," she said.

IntelleGrow is a non-banking financial company that has provided debt funds of between 50 lakh and 5 crore to 40 social impact start-ups in India.

According to Manzar of DEF, a good venture, which investors might like, is one that intends to solve a social problem and “in the process of making it happen, creates profit, which can be shared and distributed equitably among all the stakeholders in ecosystem".

Hyderabad-based Smaat India Pvt. Ltd, for instance, supplies drinking water to more than 3,000 communities at approximately 25 paise per litre.

Karunakara Reddy, founder of Smaat India, who did most of his research on water when he helped launch Aquafina mineral water in India during his stint at PepsiCo India Holdings Pvt. Ltd, said, “I came from a village in Andhra Pradesh where water was the main cause of illness, and good water was available far from the town. I knew that access to potable water at affordable prices would be a boon."

According to the Planning Commission, there are about 3.3 million NGOs, 26.1 million MSMEs (micro, small and medium enterprises) and 10-15 million micro enterprises in the country.

“Most of these are all social ventures, but any bridge between these three and the outside world is also a social venture," said Manzar.

The biggest challenge, say experts, is that investors are wary about investing in social start-ups because of the long gestation that leads to dilution of investments.

“The trick is to be sustainable and profitable at the same time," said Amit Kumar Rathi, vice- president at Unitus Capital, which functions like an investment bank for social ventures.

Investors like Agrawal of Accion, though, look at social ventures as a part of their portfolio and are “usually ready for long-term commitment".

“Instead of calculating in terms of RoI (return on investment), we look at the impact created," he said.

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