By Ritu Verma, Co-Founder & Managing Partner, Ankur Capital
Headquartered in Mumbai, Ankur Capital is a social venture fund investing in start-ups that impact low-income communities in India by adding value and long-term support to the businesses.
Compared to the frenzy of tech driven startups for middle class Indian consumers, there is very little that is said about the opportunity for innovation using technology in rural India. But the truth of the matter is that digital penetration into the rural heartland opens up a host of opportunities, and startups, for new ways to reach customers that were never before touched and had been left to realm of subsidies and government schemes. The levers of change are lower cost of delivery, enhanced transparencies in the system and potential to leverage and monetize data from a large swathe of customers in rural India.
The fast adopting tech savvy farmer is using bite size data from telcos to connect with the outside world and likewise let the outside world connect with her. The villagers habits, tastes, needs are being captured. New ways of doing business are emerging. Don’t get me wrong,customer remains value conscious and are financially much more prudent with their moneymaking and careful spending decisions. However, technology offers a low-cost medium to connect with most of India that has been off the map due to low incomes and prohibitive cost of reaching them.
Take for example a start-up in Udaipur – Karma Healthcare that knows that given our acute shortage of medical professionals doctors will never be at every village center. However doctors in cities have periods of low utilization that could be tapped through technology and brought to rural patients. Thus, a high cost resource – the doctor was better utilized and a hard to reach patient could now access a legitimate doctor through an m-health platform.
Similarly, agriculture has always been the realm of subsidies and government interventions and the use of the word technology was limited to crop research. However, given todays rising food demand and consumer preferences it is imperative that each farm operates as a factory optimizing production and linking it to demand. Given India’s fragmented small farm holding managing production is a Herculean task. CropIn, a Bangalore based startup realized this and uses a mobile based application to bring farms on the cloud connecting the farmer to the supply chains while bringing the farms onto desktops of food manufacturers, significantly bringing down costs and incidences of crop failure in the supply chain.
With mobile penetration expected to reach 350 million people and more than a third of that coming from rural India, which is hungry for information and is growing rapidly, many startups are recognizing the opportunity and are coming up with innovative business solutions. Government initiatives for a digital India is only likely to accelerate this process. Players in e-commerce are already seeing the demand from these pin codes and are focusing on solutions to reach the rural customer.
At Ankur Capital we already see a rise of such rural focused technology startups and expect that the coming years will see many more which focus on this market. The journey may not be simple and bridging the gap will involve walking the last mile and investing to close the gaps in the ecosystem. However, most Indians still live in non-metro and bringing them online and offering solutions to deliver their needs will have its payday.