Social impact startups are on the rise in India

An increasing number of Indian startups are leveraging technology to build smart and economically viable solutions to accelerate social impact. Some are teaming up with the Government to serve India

December 15, 2019

Currently, there are more than 400 social impact startups in India and the count is growing at an annual rate of 20 per cent

Udaipur-based Khushi Baby has developed a disruptive digital wearable which stores health-related data of mothers and children

Swajal, a water-tech social impact venture, provides IoT-based drinking water ATMs that sell water at affordable prices

Last year, an US$150 million environment fund, Massive Fund, was launched to invest in ventures working on climate issues

A mobile app for midwives to screen pregnant women in rural areas to identify and track high-risk pregnancies. A solar-powered water ATM providing clean water in villages, urban slums, and public places and a smart meter to measure water consumption in households. These are some of the recent innovative technologies that have been created by new social impact tech startups in India.

In the recent past, India’s robust startup community, in sync with the global drive to encourage sustainable business models, has swung into action to leverage technology to build smart and economically viable solutions to accelerate social impact. Indeed, there is a new breed of social tech entrepreneurs offering tech-supported answers to solve India’s age-old problems.

According to the trade association of the Indian IT industry, the National Association of Software and Services Companies (NASSCOM), there are over 400 such social impact startups and they are growing at the rate of 20 per cent. These social entrepreneurs and startups are seeing scalable opportunities and gaps and capitalizing on them to create social impact at scale while remaining profitable, as per NASSCOM. Industry experts believe that social sector startups will form the next phase of disruptive startup growth in the country. And, significantly, they seem to be attracting investor funding as well.

What is interesting is that these entrepreneurs are offering unique solutions across different sectors such as health, water, agriculture, and clean energy.

Tackling health concerns in India 

In the healthcare sector, for example, these startups are trying to solve traditional challenges by offering to bridge the gap between medical practitioners and end-users, improve early detection and well-being and track health-related needs.

Social impact startups are getting a boost from government initiatives such as the Fund of Funds for Startups that has a corpus of INR 100 billion

Take the case of Bangalore startup, Forus Health, which has developed affordable and accessible medical technology gadgets like portable retinal eye imaging devices and cloud-based telemedicine platforms. This startup, set up to lower health costs and democratise eye care, has been helping in early detection of preventable blindness. It has opened an office in the US and is backed by investors like Accel Partners, IDG Ventures, Asian Healthcare Fund, and Team Fund.

To curb infant mortality rates due to vaccine-related diseases and to lower pregnancy-related deaths, Udaipur based Khushi Baby developed a disruptive digital wearable – a necklace – which stores health-related data of mothers and children. They have worked in 70 villages, along with government Anganwadi workers and plan to take their solution, which helps to bridge the immunization gap to track 33,000 mothers and their infants across 300 plus villages. 

Khushi Baby plans to expand its operations to Karnataka, Gujarat, and Haryana and enlarge their scope of work to include primary healthcare along with the Rajasthan Ministry of Health and Welfare. This social impact enterprise is funded and supported by a host of organisations such as UNICEF innovation, YALE University, International Initiative for Impact Evaluation and more. 

Tech innovation for the water crisis

These tech startups are working to tackle India’s looming water crisis as well.

With nearly 40 per cent of India’s population expected not to have access to clean drinking water by 2030 (NITI Aayog report), due to depleting groundwater resources and climate change impact, entrepreneurs are focusing on providing advanced, hi-tech solutions. Water-tech startups are offering ways to either provide access to clean drinking water or build measurement apps to collate data and get insights to conserve this precious resource. 

There is Swajal, a water-tech social impact venture that provides IoT-based solar-powered clean drinking water ATMs, that sell water at affordable prices to villages, urban slums, and public places. It has impacted over 500,000 people across 17 Indian states, the company claims. 

Monitoring the machines through IoT technology, the startup can manage, update and even repair these dispensers. The startup faced a challenge to secure funding to build their prototype, which they got from a clutch of angel investors and grants.

In October this year, an IoT-based water management startup from Chennai, WEGoT Utility, had raised US$2 million in seed funding from a group of Indian entrepreneurs and investors. Their product is a sensor-based IoT device and a software platform that helps to reduce demand for water by more than 50 per cent by tracking real-time flow. It captures and shares real-time data on daily water usage patterns with clients incentivising them to save water over time. 

Similarly, several startups have come up around India to offer intelligent technologies like smart meters and systems that can detect small but significant leaks that can cause a lot of damage. Take the case of SmarterHomes, whose water meter has a data logger that runs on in-built software to allow residents to track their water consumption.

Combating pollution and air quality

Another area of social concern that is gaining a lot of traction is the environment space. Last year, a US$150 million environment protection focussed fund, Massive Fund, was launched to invest in startups, companies, and individuals who are working to reduce pollution and climate challenges. The fund, backed by India’s leading VCs and top angel investors, will look to support enterprises operating in green city, clean food, carbonless future, reducing plastic pollution, clean energy and forest restoration. 

Right from harnessing solar energy to biomass and biofuels for electrification to developing electric mobility solutions, etc., clean energy startups are making great strides in the startup space. Bengaluru-based Ambee is an environmental intelligence startup, founded in 2017, which provides data about hyperlocal air quality accessible to developers, consumers, health researchers, and media companies. The data includes sensor data, weather patterns, traffic data, the ratio of diesel to petrol vehicles, etc. Bollywood actress Aishwarya Rai Bachchan and active investors like Rajan Anandan, former Google India Managing Director, have invested in this IoT startup.

There is Ecolibrium Energy, a startup that enables commercial and industrial enterprises to become energy efficient, reduce their energy-related expenses and improve the productivity of their existing assets through its flagship IoT focussed product – Smart Sense. Their clientele includes PepsiCo, CocaCola, Yamaha, Godrej Interio, Delhi Metro Corporation, Mahindra and so on. 

Social tech entrepreneurship gets a boost

Social impact startups are getting a boost due to government initiatives such as Fund of Funds for Startups with a corpus of INR 100 billion extending funding support to innovation-driven startups; the easing of regulations like the removal of the angel tax; simplifying exit process and setting up innovation and tinkering labs and encouraging private incubators with funding. There are many social incubators such as Centre for Innovation Incubation and Entrepreneurship (CIIE) in IIM Ahmedabad, Rural Technology and Business Incubator in IIT Madras, and SheLeadsTech by Facebook, NASSCOM’s 10,000 startups to name a few, who are offering access to mentors, funds, tools, technologies, and knowledge.

India has a history of being active on the impact investment front as well. A McKinsey report states that more than US$5 billion of impact investments have taken place in India in a span of six years (from 2010 to 2016). Of late, it is not just homegrown impact funds but global PE firms, regular VCs and pension funds who are entering this turf and showing interest in investing in social impact enterprises. However, the main challenge will be to scale and sustain overtime as these social tech startups have to show growth and impact to investors. They have to learn to tread a fine balance between profit and social impact and find the right mentors to guide them to grow and sustain, say industry reports.