Emerging Entrepreneurs

Making an impact at the base of the economic pyramid

Our Bureau | Updated on March 10, 2018 Published on April 03, 2017

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Unitus Seed’s portfolio companies created 3,600 BoP jobs in 2016

Unitus Seed Fund, a leading impact venture fund that invests in start-ups innovating for the masses, says that its portfolio companies have directly impacted 8.42 lakh Base of the Economic Pyramid (BoP) lives across India, a 95 per cent year-on-year growth. The portfolio companies have created 7,800 jobs, 46 per cent of which were BoP employees.

These statistics are revealed in its recently released annual impact report for 2016. Unitus is in the process of raising its second fund, of about ₹300 crore ($45 million). It will invest in 25-30 start-ups over the next three-four years from this fund, mainly in education, healthcare and financial technology. Its first fund of about ₹125 crore ($23 million) was invested in 23 start-ups, 14 of which survived. A bulk of its investments goes into ventures in education and healthcare, with the balance going into sectors such as mobile internet, retail and e-commerce agriculture, and mobile and consumer types of businesses.

Unitus provides seed capital, and, from the first fund, invested ₹1.5-2.5 crore in each venture, going up to ₹6.5 crore through follow-on investments. From the second fund, it will write larger cheques initially itself, as much as ₹3.4 crore ($500,000). It will typically exit when the ventures raise the third round of institutional capital, or the Series C round. Besides the capital, Unitus offers strategic and operation support to the ventures, helps the portfolio companies get growth capital and intensify the mentor-adviser network.

According to the impact report, its portfolio companies have cumulatively raised 4.61 times the investment made by Unitus Seed Fund in follow-on investments. Ten of its portfolio companies raised Series A funds and two raised Series B funding. “Their continued growth and advancement are robust indicators that our investees’ highly scalable, profitable solutions are effectively addressing India’s low-income consumer needs across diverse sectors,” says Srikrishna Ramamoorthy, Partner, Unitus Seed Fund.

Social scale

On the social scale, Unitus selects companies that have the potential to impact at least one lakh BoP families through their products and services and provide BoP individuals at least 1,000 new and better jobs through the formal economy in five years.

The report says that by the end of 2016, over 8.42 lakh BoP lives have been impacted and close to 3,600 BoP jobs created. The portfolio companies are on a path to financial sustainability through increased revenues and raising additional capital.

Portfolio companies have raised $43.5 million in follow-on capital, 4.61 times the initial funding from Unitus, as of December 2016. They generated cumulative revenues of $15.5 million as of December 2016.

Published on April 03, 2017

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