Agarwal spoke to indianexpress.com on the challenges confronted by social companies in India, ‘jugaad innovations’, how tech has been leveraged to create influence in people-first social enterprises, and about his investee corporations which have used revolutionary tech for creating social influence. Edited excerpts:

Venkatesh Kannaiah: We hear lots about ‘jugaad innovation’ in India. Why is it that such innovation hardly ever will get funded?

Arvind Agarwal: While innovation, or “jugaad” as we name it, is critical and may be very attention-grabbing on the floor, we should realise that it’s going to solely be investable if it exhibits the potential to generate constructive outcomes for traders and different stakeholders.

Also, to infuse cash into such improvements, we require a proper institutional construction like an organization or an organisation with a sturdy enterprise mannequin, which is generally missing. We discover that almost all of those improvements come from people and rely solely on their enthusiasm and perspective. It won’t be bankable in the long term.

For influence traders, it’s all the tougher as a result of it’s troublesome to discover a actually distinctive innovation that can even create both social or environmental influence. (Express Photo by Jithendra M)

Such jugaad improvements are principally positioned to obtain grants from governments or foundations. But in terms of traders, that is additionally a reputational threat and subsequently requires much more dedication than a grant. For traders or funds, there’s additionally the query of whether or not the corporate and innovation have the scalability and the flexibility to soak up funds. Many occasions, it’s missing.

For influence traders, it’s all the tougher as a result of it’s troublesome to discover a actually distinctive innovation that can even create both social or environmental influence. There isn’t any mannequin to establish and validate such improvements and the influence that they will generate.

Venkatesh Kannaiah: Is expertise and influence by means of expertise a core a part of influence investing?

Arvind Agarwal: At C4D companions, it’s individuals first and earnings subsequent. Technology comes third. We perceive that expertise may be an enabler for environment friendly enterprise processes, however we consider it’s not the core of any enterprise. At the core of any enterprise mannequin needs to be its objective. Moreover, our understanding is that expertise doesn’t work properly in all environments, notably Indian rural environments. Many issues within the rural sector and within the casual sector are associated to livelihood points, for which expertise will not be the instant reply.

Venkatesh Kannaiah: There is loads of dialogue about digital public items and the way these might in the end resolve some intractable points like local weather change. What are your views on this.?

Arvind Agarwal: Digital adoption in India has witnessed great progress previously decade, and digital public items reminiscent of UPI, have absolutely introduced in a sea change. But whereas digital penetration ranges in city areas have been spectacular, it’s not the case in rural areas.

I believe expertise will assist in bettering operational efficacy for companies, and by enhancing traceability and trackability additionally assist in lowering greenwashing to a big extent, serving to generate significant influence.

In the long term, digital public items like UPI and merchandise primarily based on it within the health-tech or agri-tech sectors would generate a considerable influence. However, within the brief to medium time period, we really feel that the tech for the underside of the pyramid shoppers must be visualised another way. The hole is big, and product choices and options must be designed to go well with the underserved populations.

For occasion, have a look at schooling as a sector — it has now grow to be edtech, which has an city middle-class focus. Similarly, have a look at agriculture as a sector, which we now name agritech — what number of farmers are literally capable of entry and use these new applied sciences? Just including the phrase ‘tech’ to a sector does probably not assist the sector.

Venkatesh Kannaiah: Can you inform us about a number of of your investments in India which created influence utilizing tech?

Arvind Agarwal: Many of our social enterprise investments have leveraged expertise to develop their companies.

One of our investments in India, LabourNet, is a platform for the skilling and upskilling of casual employees. It has now reworked itself right into a tech platform for compliance and on-line coaching of such employees. Several SMEs in India face an enormous burden of compliance points when coping with the casual labour power, and they don’t have the capability to handle the compliance points.

Leveraging expertise, LabourNet has developed a web-based platform referred to as SAHI to resolve the problem. What began as a blue-collar skilling initiative is now an automatic workforce administration system with digital job sheets, automated attendance, efficiency monitoring, and digital cost transfers, driving change and earnings.

Another one in every of our investee corporations — 1Bridge — gives last-mile assisted e-commerce providers for rural shoppers. It has main e-commerce corporations as its companions and has educated village youth to acquire merchandise for rural shoppers and supply providers from cell recharge to cash switch on the 1Bridge platform. The social enterprise can be changing into hyperlocal by leveraging alternatives by means of the Open Network for Digital Commerce (ONDC).

1Bridge additionally has a VR App that helps rural shoppers expertise merchandise a lot better in a 3D atmosphere and tracks client conduct with an analytics backend, offering attention-grabbing insights into client behaviour. They have additionally created a blockchain-based mannequin for producing belief scores primarily based on client transactions.

There’s additionally our investee firm Freyr Energy which works within the photo voltaic power sector. The photo voltaic rooftop sector is a really fragmented one, stuffed with both mom-and-pop outlets of various service suppliers or massive companies that service massive corporations. Freyr has launched an revolutionary tech platform to hyperlink their channel accomplice community and family shoppers, making certain environment friendly providers, and leveraging expertise to create an outsized influence.

Venkatesh Kannaiah: How massive is the influence funding ecosystem in India, and which areas are they focussed on?

Arvind Agarwal: It may be very troublesome to foretell the quantity of funds within the influence ecosystem in India. For instance, of late, there are loads of funds and enterprise capital corporations which declare that also they are investing for influence. But when you look intently, they’re all within the conventional funding mannequin. Most of it’s claims and loads of inexperienced washing and gender washing goes on beneath this so-called influence funding by conventional enterprise capital gamers.

Today, as an influence fund supervisor, I’ve supported over 15 social enterprises which might be working towards creating sustainable livelihood alternatives for underserved communities throughout the nation. (Express Photo by Jithendra M)

Venkatesh Kannaiah: On the influence funding ecosystem, you discuss of an absence of a standard influence measurement framework and lack of a standardised construction. Can you clarify?

Arvind Agarwal: There isn’t any outlined technique to measure in depth the influence that an funding is creating. Everyone has their very own metric. Unless there’s a frequent influence measurement framework, then we’re evaluating apples and oranges more often than not.

In phrases of the authorized framework, too, there’s a want for clear demarcation within the matter. Those who work on actual influence, livelihoods and variety needs to be clubbed collectively.

Venkatesh Kannaiah: What introduced you to influence investing?

Arvind Agarwal: I grew up in Purulia, West Bengal witnessing the struggles of the underserved areas in rural India. From a really younger age, I used to be decided to go away these struggles behind to grow to be an individual who might contribute again to society.

After a two-decade profession within the non-public fairness sector, I made a decision to return to Purulia and arrange my very own enterprise, a rural BPO, that might make use of rural youth and uplift the underserved area. The enterprise failed, but it surely was a blessing in disguise as I moved on to the influence investments sector, working for one of many international influence funds.

Today, as an influence fund supervisor, I’ve supported over 15 social enterprises which might be working towards creating sustainable livelihood alternatives for underserved communities throughout the nation.