Healthcare start-ups now attracting Indian tycoons

Tuesday 16th December 2014 05:44 EST
 
 

Ratan Tata has invested in an affordable healthcare services startup - Swasth India - as for-profit social ventures catch the attention of high net worth individuals (HNIs) and top industrialists.

Tata, who recently invested in e-commerce startups Snapdeal, Bluestone and Urban Ladder, has invested Rs 20 million in Swasth India in his personal capacity. Swasth India provides affordable healthcare services to low-income people. The Tata Sons chairman emeritus is said to be keen on pursuing such investments which have a social impact, the sources added.

With such enterprises, 'socialpreneurs' eye twin objectives of creating a positive impact on society and generating profits. The concept of investing personal wealth with a financial as well as social bottom line is generating many 'likes' if investments by HNIs and industrialists like Harsh Mariwala and Kiran Mazumdar-Shaw are anything to go by.

Swasth India, to which Tata has provided second round of funding, was founded by Ankur Pegu and Sundeep Kapila - both 2001 IIT Bombay graduates, who prior to chasing a common dream of providing affordable healthcare to the common man had worked as management consultants in KPMG and McKinsey for 7 years.

Usually, it is philanthropy or charity most industrialists are associated with, but "impact" investment has begun to attract them as well. Mazumdar-Shaw, in addition to her investment in diagnostic company XCyton, has provided modest seed funding to Myhealthmate, a social venture founded by Rahul Batra and Shwetank Verma. While Tata and Mazumdar-Shaw are not new to the growing breed of socialpreneurs, the number of investments they are making in this space is certainly rising.

Mariwala, chairman of Marico, on the other hand, has made a debut in this space with a joint personal investment along with his son Rishabh, in Unitus Seed Fund, a $20 million seed-stage fund based in Bangalore and Seattle that invests in startups innovating for the masses in India.

Over the last year and a half, driven largely by his instinct, sources said Tata has invested a part of his personal wealth in such ventures, which include Grameen Capital of Muhammad Yunus and Altaeros Energy. Tata's investment in Swasth India is through an optionally convertible preference share instrument, which could eventually convert into a minority stake of around 5 to 10%.

Swasth India is a self-sustaining health system that provides one-stop access to healthcare to low-income people at half the market prices. Its services are delivered through a network of Swasth health centres. "We have received two rounds of funding, the first being from friends. The quantum of investment per centre is not significant, but given Swasth India's social objectives we're looking for patient capital," said Ankur Pegu.


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