Aarohan ventures: Incubating change

What is common between a company that provides cheap solar energy to rural households, a company that manufactures a portable diagnostic device that pre-screens eye ailments and a company that produces smokeless energy efficient Chulha for rural households. All of them have been incubated and mentored by IIM A based Aarohan ventures.

Development of start-up ecosystem in India had a precedent in west, which helped us in emulating the best practices like accelerators, incubators, seed funding, angel investments, and tweaking it to suit Indian context. But developing a social enterprise ecosystem is a totally different ball game. It comes with its unique set of challenges and there is no clear predefined model to bank upon. Aarohan ventures precisely wants to tackle this challenge head on.

Part of the IIM Ahmedabad based CIIE; Aarohan ventures have set itself up a daunting task, to build a nationwide network of social enterprise incubators and mentors.

In a stimulating discussion, Shashank Rastogi (Director) and Vipul Patel(Sr. Manager) of Aarohan ventures, share their thoughts on how social enterprise sector is evolving, its challenges and how Aarohan plan to change the social entrepreneurship landscape in India.

About:

Aarohan ventures, which is a part of Centre of Innovation, Incubation and Entrepreneurship, was spun off as a separate entity in 2013.It has a team of about 10, to provide support to social enterprises and producer collectives across the country .So far they have invested in around 18 enterprises and around 10 enterprises are supported through accelerator programs.

Philosophy:

A line in their website succinctly captures their philosophy; “we believe that disruptive entrepreneurial solutions can offer an exciting opportunity to solve major development challenges in India”. The keywords are disruptive and developmental challenges. Any disruptive model seeks to change the status quo, which in social sector space requires significant effort and understanding of local nuance. Bringing social change requires change in habits of people, for example a smokeless Chulha seeks to replace something which has been used by rural households for a very long time. And at the same time social enterprises tries to leverage business principles to create meaningful impact in a short interval. The trick is to balance the forces of business and social change, and find the right equilibrium

Scalability: Multiple Geographies

Unlike a conventional start-up which generally works from city and have the whole team at one location, social enterprises works in remote geographies, sometimes in the poorest part of the country. As a result there is hardly a concept of well defined office or central location, with team traveling most of the time. Also, consumer insights of a particular geography might not work in another, because of differences in social and cultural contexts. Social enterprises don’t normally target a fairly uniform consumer base like conventional start-ups.

For example, a social enterprise engage in clean water solutions might have to tailor its solution for consumers in Rajasthan and Uttarakhand quiet differently, though both of these regions face drinking water scarcity.

Consumer trust:

Consumer feedback is a critical element in developing the right solution for social enterprise; this can only be done by having feet on ground. A software product\ e-commerce start-up can track user behaviour online and iterate. But social enterprises are working on solutions which impact lives, solutions or services that can bring transformative change. Hence building consumer trust and connect requires time and effort, as a result social enterprises typically have long gestation period.

Further, social enterprises by their very nature work in sensitive sectors. Consumers are not just receivers’ of services and products but active engagers. Grassroots level connect is required with consumers to build a level of trust, which can be provided by local ngos working in the area.

Building a network:

This is where Aarohan wants to be different from a simple incubator, they just don’t want to incubate social enterprises but create a network of institutions spread across India who can nurture and guide social enterprises. These institutions learning from each other and sharing best practices can provide much needed on ground support to social entrepreneurs

To this effect, Aarohan has been conducting workshops in partnership with GIZ, which brings together not-profits, CSR wings of companies and educational institutions who are committed to helping social enterprises and create more regional incubators across country.

Social Enterprise Ecosystem chart

Funding:

Another common refrain of impact investors have been lack of sizeable number of investment ready social enterprises. Social enterprises that have moved from concept to execution stage and are ready to scale. This is the gap that Aarohan aims to fill. Programmes like last mile accelerator with Village Capital and power of Ideas in partnership with economic times helps Aarohan ventures to identify entrepreneurs working on issues ranging from food security to rural healthcare.

Mentoring:

According to Shashank, who heads Aarohan ventures, they are trying to bring together a set of likeminded individuals who can work together towards creating a social enterprise mentor network in India. This includes creating a seed funded pipeline of social enterprises in India, creating a network of institutions committed to helping social entrepreneurs, and also approaching impact investors looking for right opportunities to fund.

Few of the companies funded so far:-

Boond : A solar energy company, selling cheap and energy efficient solar power systems to rural consumers.

Istar : A training company, which provides industry ready skills to students.

Forus healthcare: A medical devices firm creating smart diagnostic devices.

Greenway Grameen Infrastructure: A company engaged in creating clean energy products using human centred design approach.

Awaz De: A group messaging service provider which helps organizations reach local communities in their own language.

Callystro: A company that uses technology and gaming techniques to create educational training material for children.

There are still many questions that Aarohan team is trying to figure out.

How do you measure impact of social enterprises? Do you focus on depth or breadth of intervention? How you ensure mission drift doesn’t happen? Do you even hold that right to advise founders on mission, after all it’s their company? Where does an impact investor’s responsibility ends?

Aarohan Ventures has taken up a bold task for itself, the mission to provide social enterprises the right kind of mentoring, network, support and funds so that they can become self sustaining and achieve the requisite scale. And they will have their hands full.

On one of the signboards at Aarohan ventures’ office, it was written, “Pick your fight”, which they have certainly done. Who knows where we might find the next AMUL or Grameen Bank, we are waiting.

About the Author :

Nitin Malik, is an alumnus of Institute of Rural Management Anand (IRMA), batch of 2011-13. He loves to write on social enterprises and microfinance sector and observe larger trends

in start-ups space. He is passionate about football.