The philanthropic arm of the Tata Group, Tata Trusts is looking to invest in social sector startups and is looking to raise $30 million for the same, according to an Economic Times report.
Over the past year, Tata Trusts incubated and invested in 15 startups at the seed level and is now looking at social sector startups.
Manoj Kumar, head – innovations, Tata Trusts told ET that Tata Trusts has been incubating and accelerating startups working in areas of healthcare, sanitation, water and agriculture for over a year now. And this has been happening through the Foundation for Innovation and Social Entrepreneurship (FISE).
“But now there’s a need to scale them up. Tata Trusts being a philanthropic organization can only provide grants to various entities and therefore, there’s a need to raise funds from sources other than Tata Trusts,” he added.
Having received an approval from the Securities & Exchange Board of India (SEBI) for a Category One Alternative Investment Fund (AIF), Tata Trusts is planning to reach out to other philanthropic organisations and individuals across the world to contribute to the fund.
ET reports that Tata Trusts will be working with startups through its Social Alpha model to give them deep domain research and innovation facility. Post this, workable solutions will be given seed capital through the FISE. These solutions will then be tested in the market for affordability and accessibility through its network of NGOs.
With the fund, it wants to now complete the chain by providing scale to the start-ups.
Harisaru Dala, which works for creating sustainable livelihoods for waste pickers, Habba a social ecommerce platform designed to maximise financial returns for low-income artisans and weavers across India, and Meghshala which has created a community of teachers along with Rang De and Sabziwala are some of the startups that Tata Trusts has provided seed capital to.
FISE, which has an allocation of about Rs 55 crore over the next three years has already invested Rs 10 crore in the last one year. A part of this investment has been in 15 startups with an average ticket size of Rs 50 lakh, reports ET.
Manoj says that FISE hopes to be able to invest in 15-20 companies over the next two years and manage to raise a larger fund next year, thus increasing the investment size to anywhere between half a million dollars to $ 1.5 million per company in equity investments.
Image: Tata Trusts/Cinicell