Utopian it might be, but everybody has a dream. The investor community which invests in business ventures from sunrise sectors, though feared for their cut throat zeal for lower valuations while investing, is no different. The investments they make as part of their professional commitments might be where their left brains come in handy, but that doesn't mean that they don't have a right brain at all. Every investor has a business idea close to his heart. Ashish Agashe & Nikhil Menon spoke to some investors on such 'matters of the heart' for a peek into how they see the future and surprisingly, the common thread knitting all the ideas was their social relevance.
AVNISH BAJAJ MD, Matrix Partners
MINIFINANCE FOR THE UNBANKED IS KEY
IN THE NON BANKING FINANCE market, there is a glaring gap between microfinance and regular bank advances. Microfinance institutions usually lend upto the limit of Rs 30,000, while on the other hand, banks don't offer loans under a few lakhs. I think there's room for 'minifinance' as well, which will fill the gap for people who need loans anywhere between Rs 30,000 and say, Rs 4 lakh.
Bajaj started toying with this idea about a year ago, when driving across the city, the all-toocommon scenes of slums and poverty in his city began disturbinghim. "All the major initiatives by financial institutions today are targeted at the top 100 million or so of our population. But what about the people who work in ourhomes—drivers, maids, masons and so on? Because they don't own PAN cards and other documents required, they remain unbanked for life. That's really unfair, because microfinance has shown that that segment is cash flow-driven and repayment rates are quite high," Bajaj says. Initially, the NBFC could start with assetbacked loans like home loans, for lower-level employees of corporates. The interest rates could be higher than regular rates, but below MFI rates. The employer would take guarantee for the loan, whose repayment period would be 5-7 years, as opposed to the usual 20-30 years. It doesn't have to be pitched as a CSR thing to companies; but can be an employee engagement effort. "In my view, any NBFC that can do this will enjoy sustainable and profitable growth," Bajaj says. Eventually, non asset-backed loans can be brought into the picture and this initiative can be extended to individual employers underwriting their employee's loans.
MINIFINANCE FOR THE UNBANKED IS KEY
IN THE NON BANKING FINANCE market, there is a glaring gap between microfinance and regular bank advances. Microfinance institutions usually lend upto the limit of Rs 30,000, while on the other hand, banks don't offer loans under a few lakhs. I think there's room for 'minifinance' as well, which will fill the gap for people who need loans anywhere between Rs 30,000 and say, Rs 4 lakh.
Bajaj started toying with this idea about a year ago, when driving across the city, the all-toocommon scenes of slums and poverty in his city began disturbinghim. "All the major initiatives by financial institutions today are targeted at the top 100 million or so of our population. But what about the people who work in ourhomes—drivers, maids, masons and so on? Because they don't own PAN cards and other documents required, they remain unbanked for life. That's really unfair, because microfinance has shown that that segment is cash flow-driven and repayment rates are quite high," Bajaj says. Initially, the NBFC could start with assetbacked loans like home loans, for lower-level employees of corporates. The interest rates could be higher than regular rates, but below MFI rates. The employer would take guarantee for the loan, whose repayment period would be 5-7 years, as opposed to the usual 20-30 years. It doesn't have to be pitched as a CSR thing to companies; but can be an employee engagement effort. "In my view, any NBFC that can do this will enjoy sustainable and profitable growth," Bajaj says. Eventually, non asset-backed loans can be brought into the picture and this initiative can be extended to individual employers underwriting their employee's loans.
HARSHAL SHAH
CEO, Reliance Venture Asset Management
TAILORMADE FOR TEACHERS
IN THE HOOPLA AROUND OUR DEMOGRAPHIC ADVANTAGE, WE FORGET two crucial points—the average life expectancy is going up, while at the other end of the spectrum, as the number of youngsters rise, there is an increasing need for them to be possessed with the best of hard-nosed practical knowledge. Adding more pressure is the depleting teachers' pool that we are beginning to wake up to. A single solution is all it requires—taking the concept of gated communities to the next level. Residents of a community for retired citizens will find it more dignified if they can pass on the practical knowledge they gained in their life to youngsters. The entrepreneur selects citizens of the community based on their working life. He tailor makes teaching modules where executives come and stay for either short or long-term by paying a certain amount.
CEO, Reliance Venture Asset Management
TAILORMADE FOR TEACHERS
IN THE HOOPLA AROUND OUR DEMOGRAPHIC ADVANTAGE, WE FORGET two crucial points—the average life expectancy is going up, while at the other end of the spectrum, as the number of youngsters rise, there is an increasing need for them to be possessed with the best of hard-nosed practical knowledge. Adding more pressure is the depleting teachers' pool that we are beginning to wake up to. A single solution is all it requires—taking the concept of gated communities to the next level. Residents of a community for retired citizens will find it more dignified if they can pass on the practical knowledge they gained in their life to youngsters. The entrepreneur selects citizens of the community based on their working life. He tailor makes teaching modules where executives come and stay for either short or long-term by paying a certain amount.
LUIS MIRANDA
President & CEO, IDFC Private Equity
THERE'S MONEY IN SKILLING UP
INDIA HAS A LARGE NUMBER OF 'SKILLED' WORKERS LIKE PLUMBERS, carpenters, welders, etc. However, there is no formal training institute that offers certified training courses in most of these fields. Now imagine, if these individuals could be sufficiently trained, given advanced tools and mobile phones. They could be 'on call' all the time and offer much higher levels of service, which would result in better money and more opportunities for them. "I feel this field is ripe for entrepreneurial opportunities," says Miranda. But who pays for this training? "The modules will need to be developed in collaboration with bodies like the National Skill Development Corporation and the government could pitch in by giving out vouchers to the poor instead of money handouts that have no real point," he adds.
President & CEO, IDFC Private Equity
THERE'S MONEY IN SKILLING UP
INDIA HAS A LARGE NUMBER OF 'SKILLED' WORKERS LIKE PLUMBERS, carpenters, welders, etc. However, there is no formal training institute that offers certified training courses in most of these fields. Now imagine, if these individuals could be sufficiently trained, given advanced tools and mobile phones. They could be 'on call' all the time and offer much higher levels of service, which would result in better money and more opportunities for them. "I feel this field is ripe for entrepreneurial opportunities," says Miranda. But who pays for this training? "The modules will need to be developed in collaboration with bodies like the National Skill Development Corporation and the government could pitch in by giving out vouchers to the poor instead of money handouts that have no real point," he adds.
SASHA MIRCHANDANI
MD, BlueRun
Ventures India
CARE FOR HEALTH
SCIENCE HAS MADE TREMENDOUS advancements, but the price points at which we enjoy the fruits of technology make innovation almost irrelevant, as a majority of mankind cannot access it. "How about having a single machine which will scan bodies for multiple diseases? People can pay around Rs 800-1,000 for a host of tests. I think that is what our companies should look for," Mirchandani says. Currently, a full-body scan costs upwards of Rs 8,000 if you also include an MRI. Mirchandani, who is also co-founder of Mumbai Angels, says that healthcare is a largely ignored segment by the entrepreneur community. "People are suffering from diseases they shouldn't be. There are solutions out there but the price points are so high that it becomes unaffordable. You don't realise how big the BPL market is," he says, adding that pre-empting a disease is the key to having cheaper solutions for cure.
Such a technology which gives "low hanging fruit" will see immense interest from the investor community, he says. He adds that an increasing number of people are starting to realise the importance of such interventions.
MD, BlueRun
Ventures India
CARE FOR HEALTH
SCIENCE HAS MADE TREMENDOUS advancements, but the price points at which we enjoy the fruits of technology make innovation almost irrelevant, as a majority of mankind cannot access it. "How about having a single machine which will scan bodies for multiple diseases? People can pay around Rs 800-1,000 for a host of tests. I think that is what our companies should look for," Mirchandani says. Currently, a full-body scan costs upwards of Rs 8,000 if you also include an MRI. Mirchandani, who is also co-founder of Mumbai Angels, says that healthcare is a largely ignored segment by the entrepreneur community. "People are suffering from diseases they shouldn't be. There are solutions out there but the price points are so high that it becomes unaffordable. You don't realise how big the BPL market is," he says, adding that pre-empting a disease is the key to having cheaper solutions for cure.
Such a technology which gives "low hanging fruit" will see immense interest from the investor community, he says. He adds that an increasing number of people are starting to realise the importance of such interventions.
NIKHIL KHATTAU
MD, Mayfield
Advisors
CHEAPER ENERGY SOLUTIONS
IN THE MACRO SENSE, INDIA'S limited fuel reserves and burgeoning import costs are a big headache for policymakers. Certain steps like encouraging alternate and renewable sources of power like solar and wind have already been taken. But in many cases, the technologies have not yet matured to deliver economical alternatives and installing such capacities entails high capex as well.
An energy-intensive company which depends heavily on fuels cannot spend high sums on capex. In addition, many-a-time, we come across a scenario wherein a lot of residual energy which comes out during processes is untapped/ wasted. "We are witnessing some attempts at finding solutions to tap and conserve fuel. What we need is an end-toend solution," says Khattau. He cites the example of glass-making units where a lot of the heat produced during the manufacturing process goes to waste. Hence, a venture which comes up with solutions having universal applicability and is cheaper to install will definitely be profitable. The existing machinery of energy-intensive units undergoes a retrofit to reap the benefits of this technology.
MD, Mayfield
Advisors
CHEAPER ENERGY SOLUTIONS
IN THE MACRO SENSE, INDIA'S limited fuel reserves and burgeoning import costs are a big headache for policymakers. Certain steps like encouraging alternate and renewable sources of power like solar and wind have already been taken. But in many cases, the technologies have not yet matured to deliver economical alternatives and installing such capacities entails high capex as well.
An energy-intensive company which depends heavily on fuels cannot spend high sums on capex. In addition, many-a-time, we come across a scenario wherein a lot of residual energy which comes out during processes is untapped/ wasted. "We are witnessing some attempts at finding solutions to tap and conserve fuel. What we need is an end-toend solution," says Khattau. He cites the example of glass-making units where a lot of the heat produced during the manufacturing process goes to waste. Hence, a venture which comes up with solutions having universal applicability and is cheaper to install will definitely be profitable. The existing machinery of energy-intensive units undergoes a retrofit to reap the benefits of this technology.
