In a cover story, Outlook Business India profiles the leaders among a new breed of Venture Capital funds, which invest in social enterprises that deliver developmental benefits, AND generate decent financial returns.

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Oasis and Acumen are part of a new, growing breed of 'social venture capital funds'. These funds look to invest in companies that deliver social benefits and generate decent financial returns. They embody the new mantra: doing well while doing good. "Social capital is an emerging trend both globally and in India," says Varun Sahni, Country Director, Acumen Fund. It plans to invest $100 million over the next six years.

"There will be $1 billion coming into this space in the next five years," Sahni forecasts. Monitor India, a management consulting firm, conducted a two-year study on identifying eight low-cost business opportunities. It further narrowed this down to four: water, healthcare, education and affordable housing. "In each of these we went and talked to 2-3 entrepreneurs running the more successful enterprises. They were all good candidates and people had invested in them. So, there is a lot of interest in this space," says Anamitra Deb, consultant, Monitor Group. "But a lot more needs to be done before this becomes a flourishing investment market."

Already, seven such social venture capital funds, interviewed for this story have raised around $180 million and invested about $125 million in 72 social enterprises. All this has happened in the last six years (mainstream VCs invested a total of $3.31 billion in the same period, according to Venture Intelligence, a research service tracking private equity and M&A activity in India). Each of these funds has its own comfort zone in the social-benefit versus financial-return balance.

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