"Art to Mart" at the Deshpande Foundation’s Development Dialogue 2015

Following the Deshpande Foundation’s Development Dialogue 2015 conference in Hubli, thealternative.in published a series of session excerpts to share the learnings. I (Sreejith) had the chance to be a part of the "Art to Mart: How can we build an end-to-end value chain that brings artisans profitably to market?"  panel. 

The transcript of that session has been reprinted below as it appeared on thealternative.in. The original article can be found here.

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With over six million people (officially) working with Handicrafts in India, traditional handicrafts are a major source of income for a large number of people in rural communities, and have a huge market potential, about 20,000 crore according to some estimates, across the globe.

But while the market itself seems to be thriving, the livelihoods for most of these artisans are not.Various factors – like wages, market price gaps, and lack of technology – are forcing these artisans to move away from the handicrafts industry, to more profitable work.

How does one create a sustainable, equitable value chain for these markets? How do we ensure that rural artisans – all artisans, for that matter – are able to reach the right markets without losing out on the profits due to them?

A panel discussion hosted by Sattva at the Development Dialogues 2015 brought together practitioners who work across the craft value chain in India,: Sreejith from Upaya Social Ventures and ROPE International; Neelam Maheshwari from Navodyami.org, and RangSutra‘s Sumita Ghose, moderated by Rathish Balakrishnan of Sattva.

Edited excerpts from the discussion:

Can market led solutions bring about equitable development?

Sumita: If we are talking about an equitable model of development, it is possible only in an organisation owned collectively by all, which is why RangSutra is a company owned by these artisans. It gives you a say in how the company is run, your wages etc. Earlier, a lot of the women we worked with were paid a pittance while working for middlemen, being paid per piece.

Now, they are paid properly, according to the material, skill and time inputs required. Having shares in the company gives them not just a right but also a responsibility. They ensure that the work is quality work because they know that the company’s profit decides their dividends.

The idea that your work is valuable, that there are people who are going to buy it and that you can make profit out of it gives them a power, an awareness of the value of your work, and that comes with equitable ownership. Using your own money makes a difference because it’s something you believe in, versus just doing something out of program funds.

An incident that really motivated me is when I visited this woman’s house in a village and she had framed a share certificate we had given her. She said it was the only property that I own, the land and the house are owned by my husband’s family. She was so proud.

Should the producer/community facing entity be different from the market-facing entity?

Sumita: We decided in the formation of RangSutra not to have many organizations, we don’t have one community facing and another market facing, that’s too complicated!

What these artisans do need are quality inputs, access to markets, efficiency, timing, delivery response etc. That remains a challenge especially in our case, where 95% of the artisans we work with are from villages.

Sreejith: A very important thing is for artisans to produce what sells, to keep updating what he makes. Can we find alternatives to the saree that a weaver can make if the saree market is going down? It’s possible. Like with artisans making mats for sleeping etc.. that market has completely vanished, nobody uses them anymore.  A few players including Industree started making table mats or runners with the same material, a lot of these artisans were able to come back to their profession.

Sreejith: I completely agree that we should have a model that combines the equitable value distribution of community owned model with the efficiency of the dynamism of a private enterprise. But if I had to choose one, I’d choose market focused, more dynamic and efficient model for the question of sustainability.

Let me tell you an example which inspired me to entrepreneurship: In 2005, in Thanjavur, I visited some of the weavers’ cooperative societies that started with the best of intentions but were not working very well. We went to procure some sarees and find market for it to give an assured market to weavers.  The cooperative societies complained that they had a huge stock of unsold sarees and therefore were unable to procure more from weavers. The weavers said that 90% of the weavers had migrated to cities to look for other jobs, so they had very little skilled labour.

They told me that someone had visited them from Holland, and was stunned by the beauty of these pieces but he asked them to make scarves or shawls as there was no market for sarees in Holland. But back then, there was no internet or any way of getting in touch with the market(or that man) and they got in the same rut of producing sarees in cooperative societies. The weavers told me they don’t want to weave sarees if there is market for it, they are glad to make anything else if it’s sold.

If that type of market dynamism were possible in a community led model, it would be great. But it’s not. Another reason is the shortage of capital.

I think for these reasons, the sustainability of the enterprise depends on their ability to continuously engage the artisans, irrespective of the structure is.

We always look for scale. Would you say that a simpler model could scale better?

Sreejith: A simpler model is more accountable, more efficient etc but that depends upon the entrepreneur who runs it. Of course, you need to scale, scaling is great, but it is not easy. Just because it has worked for some organizations in some sector, it doesn’t mean it will for all.  It takes investment in capacity building, in system and community owned structure to have a good organisation. In some cases, private entrepreneur can do it much more efficiently and they have access to capital.

Neelam: To think that in 60 years in India, we have had just one FabIndia.

We don’t have enough models, we should look at these people as beneficiaries, but also entrepreneurs. For me, it’s an information gap, we need to connect producers to market opportunities. There are so many artisans, we need many more models, we can’t stick with one or two models that we think are good.

Sumita: Today, there are also lots of people leaving the field, I have seen that it’s more for young men than women. For women, it’s convenient as it allows them to earn a livelihood while working from home, but sometimes with the men, it’s more profitable to work in a city in some other job.

Sreejith: In my experience, I’d say men too are interested… provided they have a sustained income from craft. It’s not that they want to preserve the art of anything, they really need a livelihood.

Which one is more relevant to artisans, the B2B or B2C model?

Sreejith: I think B2C is extremely relevant, but in my experience, it takes more capital and therefore for  smaller entrepreneurs with  less access to capital it’s a difficult ball game. Look at FabIndia, it’s a very successful B2C model, but it takes a lot of capital.

When I started my company (ROPE International) in 2007, I was attracted by B2B opportunities and therefore I’ll talk more about that. When we started out, we did a market research and we saw that the US had 60 or 70 retailers double the size of FabIndia. They said that India has beautiful artisanal products but they don’t source majorly from India as they had issues about production, organization, compliance to social norms and so on in India. So when I started ROPE, my challenge was to build a model where consistent large scale, quality production is possible.

Sumita: RangSutra’s overarching goal is sustainable livelihoods for artisans. So for us, B2C model wasn’t viable for us when we started out. It is more difficult in India, because people take hand-skills for granted, they don’t understand why they have to pay more. Globally there is much more respect (than India) for handmade, because most people in other parts of the world have lost that skill. We do have challenges given our goal, there have been situations where we have had to make an order and make no margin at all just so that an artisan can work.

The panel wrapped up with 2 important takeaways: Building sustainable livelihoods is the obviously the most important thing to keep artisans in their work. Produce what sells, be flexible.

This article is part of a series of panel discussions and reports from the Deshpande Foundation’s Development Dialogue 2015 conference in Hubli. The Development Dialogue is a conclave of like-minded people from across the country who believe in entrepreneurship as a way of nurturing scalable solutions for development, an International social entrepreneurship ecosystem conference hosted by Deshpande Foundation India.

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Upaya Joins With Ennovent IIH, LAF: Creative Venture Fund to Expand Youth Employment and Employability Through Investment in Anant Learning & Development

Upaya is proud to announce today that it has come together with Ennovent Impact Investment Holding (Ennovent IIH) and LAF: Creative Venture Fund (LAF:CVF) to invest in Anant Learning & Development (Anant), a Delhi-based company that is working to ensure young people from poor communities across India have adequate skills training and regular access to secure stable employment with credible employers. Upaya will provide funding and business development support to Anant through its LiftUP Project framework.

Anant has developed a two-track model for improving labor markets for young people. First, the company provides placement and post-placement services through its Rozgarmela.com platform to youth in both urban and rural communities across India. Second, Anant consults with private and public sector employers to assess the effectiveness of their skill development programs through skills assessments and post-placement tracking. Anant currently operates in nine states [within India].           

“Having overseen many vocational training projects in the past, I saw that the young men and women who graduated out of training programs quickly fell back out of the formal sector workforce,” said Anant Founder and CEO Ajit Singh.

“These young people often claimed frequent miscommunication of salary, benefits as well as job roles by training and placement agencies while, at the same time, employers complained of high attrition and need for credible intermediaries for sourcing candidates. The misalignment of incentives of training and placement agencies is a central issue, and I thought that a more transparent, data-driven approach could iron out the inefficiencies in the market,” said Singh.

Unlike many placement websites in India, Anant does not collect fees from the young people being placed. Instead, the company harnesses its data collection capabilities to provide actionable insights to employers, training agencies, and government agencies so that each can improve the efficacy and efficiency of their efforts.

Singh expects to enroll 10 employers every month on Rozgarmela.com, who are collectively projected to hire approximately 250 candidates.

The Ennovent Circle, an exclusive group that collaborates to accelerate innovations for low-income markets, facilitated the investment in Anant. Both Upaya and Ennovent IIH are Ennovent Circle members.

 “The unique selling point of Anant is its strong linkages to the industry and direct contact with the beneficiaries. This helps the company understand the needs of the potential employees and connects the disconnected rural youth to the employment system,”said Ennovent Circle Manager Joel Rodrigues. “The Ennovent Impact Investment Holding is optimistic about the impact Anant will be able to create at the grass roots through this investment,” said Rodrigues.

Upaya’s support of Anant has been made possible by LAF:CVF, a venture philanthropy fund that invests in employment and empowerment initiatives that provide vulnerable youth around the world with the means to create a better life for themselves.

“Upaya sees Anant’s platform as enhancing the ability of young men and women from poor communities to earn a stable, dignified living,” said Upaya’s Director, Business Development Sreejith Nedumpully. “By harnessing technology along with a geographically diverse network of trainers and assessors, Anant is able to remove the inefficiencies from the system,” said Nedumpully.

Upaya Teams Up With LAF: Creative Venture Fund To Bring Employment Opportunities to Vulnerable Youth

Upaya and LAF: Creative Venture Fund (LAF:CVF) have come together to build skills and create thousands of jobs for young women and men living in India’s poorest communities. Through this partnership, Upaya and LAF:CVF will identify, invest in, and provide business development support to promising early-stage ventures with significant youth employment potential via Upaya’s LiftUP Project initiative.

Together, the two organizations will work to support multiple new ventures and create significant new employment opportunities across India.

LAF:CVF is a venture philanthropy fund that invests in employment and empowerment initiatives that provide vulnerable youth around the world with the means to create a better life for themselves. This partnership lays the groundwork for LAF:CVF to make its first investments in India following similar efforts in Haiti and Kenya. 

“Not enough organizations are focused on giving youth opportunities to build critical life and job skills while also ensuring they have the opportunity to utilize those skills to earn a viable living,” said LAF:CVF Executive Director Kate Genereux. “Sachi and her team have an incredible track record of providing critical financial and advisory support to promising entrepreneurs who have, in turn, become large scale employers of young people in their areas,” said Genereux.   

Upaya’s flagship program, the Life-Changing Interventions for the Ultra Poor (LiftUP) Project incubates early-stage enterprises in low-income communities by combining patient seed equity funding with hands-on financial management support. Upaya’s goal is to help each enterprise reach financial stability, scale, and become a significant local employer.

“From our initial conversations it was clear that LAF:CVF leadership shared Upaya’s vision of poverty alleviation and youth empowerment through employment.  We are thrilled to translate that philosophy into action and help young men and women from poor communities earn a stable, dignified living.” 

Assam-Based Tamul Plates Receives Follow-On Investment from Artha Initiative & Upaya Social Ventures

Tamul Plates Marketing Pvt. Ltd. is announcing today that the company has come to an agreement with Artha Initiative and Upaya Social Ventures on an investment that will allow Northeast India’s leading producer of palm leaf tableware to significantly expand its operations across the region.

The deal is notable as Tamul Plates is the only established producer of disposable tableware in the Northeast - a region with more than 100,000 hectares of arecanut under plantation and one of the poorest areas of the country. 

“This investment is a recognition that Tamul Plates is well positioned to meet the growing demand for high quality, environmentally responsible, and ethically produced products,” said Tamul Plates CEO Arindam Dasgupta. “Working in the Northeast, the company benefits from a unique combination of access to the highest quality raw materials and a producer base that takes great pride in its craftsmanship,” said Dasgupta.

Tamul Plates produces and markets high-quality, all-natural disposable plates and bowls made from arecanut (palm) tree leaves and sells them under the “Tambul Leaf Plates” brand. The company’s clientele includes a mix of restaurants, fast food establishments, event managers, and direct-to-consumer retailers.

This investment follows a recent agreement between Tamul Plates and the Government of Assam to supply the equipment for and train an extended network of affiliate rural producers. The investment by Artha and Upaya will allow the Barpeta-based company to make use of that expanded affiliate producer network by diversifying its product line, expanding its domestic sales and distribution networks, and opening export markets for its products.

“It has been a highlight of the Artha Venture Challenge to uncover a pioneering and innovative enterprise in Tamul Plates,” said Artha Initiative’s Director Audrey Selian.  “We are particularly happy to be co-investing with Upaya, and look forward to continued efforts in collaboration sector-wide through our AVC and ArthaPlatform.com programming,” said Selian. Artha Initiative is associated with Switzerland-based Rianta Capital Zurich.  

Disposable arecanut dinnerware is hygienic, chemical-free, compostable, microwave safe - and in high demand among urban consumers around the world. The production and sale of natural arecanut dinnerware not only reduces the deforestation and pollution associated with the production of traditional disposable dishes, but also provides a viable livelihood to disadvantaged communities.

“Upaya has been very impressed by the work of Arindam and his team over the past year, and believe that the company’s growth plans will benefit both customers and producers alike,” said Upaya’s Director, Business Development Sreejith Nedumpully. “We are proud to join the Artha Initiative in backing this promising enterprise, and are exciting about the company’s potential,” said Nedumpully. Upaya was Tamul Plates’s first investor.

This co-investment in Tamul Plates is the first deal completed under the formalized collaboration framework between Artha and Upaya that was announced in November 2014. Per that agreement, the two organizations are working together to deploy seed capital to help SGBs scale and create employment for the poor, share best practices around sound financial management, and disseminate tools and training for the benefit of India's wider ecosystem.

2014 Annual Report Available Now

Right click to download the Annual Report (5.1MB)

Take a look back at a year of great progress for Upaya and its partners! 

Download the organization's 2014 Annual Report here.

Drishtee, Upaya Come Together to Launch New Rural Supply Chain Social Venture

Upaya Social Ventures and Drishtee Development and Communications Ltd. are proud to announce a social venture collaboration that will create new opportunities for rural artisans to rely on their trade to earn a stable and dignified living. This pilot project with Drishtee will fill gaps in regional value chains by connecting groups of producers in rural communities across Assam, Bihar, and Uttar Pradesh with raw material suppliers and wholesale buyers of their products.

The pilot provides these groups - known as Community-Owned Enterprises (COEs) - with the technical training, management infrastructure, and market linkages needed for community-level entrepreneurship to thrive beyond their immediate area.

“In building Drishtee, we saw a new opportunity in organizing and formalizing the thousands of sole proprietors in or adjacent to our network,” said Drishtee Co-Founder and Managing Director Satyan Mishra. “Right now, village level producers are generally on their own. They are sole proprietors with very little reach outside their immediate area, and do not have the means or ability to develop customer relationships with larger clients for their product or service,” said Mishra.

Drishtee is a social enterprise that provides goods and services across rural India through locally owned village kiosk franchises. The kiosks provide services such as health, education, banking, microfinance, and livelihood services, as well as market linkages for independent farmers and other agri-processors. The Drishtee network currently serves the needs of over 14,000 rural households.

“This pilot with Drishtee - a successful company in its own right - is somewhat different from the typical business Upaya incubates through the LiftUP Project. However, the pilot’s ambitious and unique model provides an opportunity to secure stable, dignified livelihoods for small scale rural producers by connecting them with larger regional and national buyers,” said Upaya’s Director, Business Development Sreejith Nedumpully.

The initial pilot will focus on incubation of three to four COEs in the handloom textile and apparel production value chain. Per the initial plan, each of the prospective COEs will perform different steps in the process including thread spinning, weaving, sewing and garment finishing. Over the initial months of the pilot, Drishtee will organize and formalize the groups, provide training in design and quality control, and provide the necessary connections with wholesale customers. Each COE affiliated with Drishtee will employ at least 10 -15 people on a consistent basis.

“By building individual skills and allowing each person to focus on a piece of the production process, each participant can earn a living without fully bearing the burden of managing their own sole proprietorship” said Nedumpully.

At the time the company is launched, it will be lead by Vikas Mukundan, a Drishtee veteran who was selected to head up the new project. Throughout the process, Vikas will be supported by Mishra as well as members of the Upaya team.

As the pilot reaches its one-year mark, Upaya and Drishtee will review the progress toward the milestone goals and consider an expansion of the program.

Four interesting takeaways from the GIIN/ Dalberg “Landscape for Impact Investing in South Asia” report

On 18 December 2014, the Global Impact Investing Network (GIIN), in partnership with Dalberg Global Development Advisors, released a report that provides a “state of the market” landscape analysis of the impact investing industry in South Asia. The Landscape for Impact Investing in South Asia looks at the $8.9 billion in deployed impact investment capital in six countries – India, Bangladesh, Pakistan, Myanmar, Nepal, and Sri Lanka – and paints a picture of a “diverse but growing impact investing market across South Asia.”

As the report has circulated amongst the Upaya team, four main points have jumped off the page. Some of them mirror observations we’ve seen through our own experience investing in India, and others shed light on issues we are wrestling with. In no particular order:

Two of the top five areas for impact investment in South Asia – Manufacturing and Agriculture/ Food Processing - are directly contributing to livelihood enhancement. That said, they are still only 17% of the identified market.

Broadly speaking, manufacturing and agri-processing are two broad areas under which our team has focused its livelihood development efforts and we are excited to see them crack the top five areas for impact investment. 

However, the fact that the two segments combined are still a smaller percentage of the impact investment market than each of the top two categories - Financial Services and Energy – shows that we still need to expand the conversation about job creation and its social benefits in the impact investment community.  

“There is also a need to bring less-exposed enterprises into the fold in a number of countries. Even in India, where formal networks of entrepreneurs exist, it is difficult to find enterprises that are not part of these networks.”

This point really hits the heart of one of the biggest challenges in the impact investment space – pipeline. Right now, too many impact funds are only looking at the businesses that self-identify as social enterprises, and are only doing due diligence in that limited pool. The result is a sort of “social venture ghetto” where a subset of entrepreneurs are continually showcased together at business school competitions and conference panels, thus creating the impression that they represent the full scope of social ventures in the space.

Not coincidentally, the investors who have been successful are the ones who have not limited their purview to that ghetto. For Upaya, the majority of entrepreneurs we support do not necessarily self-identify as social enterprises, but simply as businesses operating in poor communities. Friend of Upaya Artha Initiative has taken a similar view of the issue with their Artha Venture Challenge, a competition that has uncovered several great companies outside of the mainstream social enterprise conversation. In both cases, Upaya and Artha have had success in finding the types of investment opportunities that were sitting outside the standard impact investor conversation but are having a positive impact through their work.

“[In India] funds are shifting toward a less opportunistic and more hypothesis-driven approach to selection; in this new approach, these funds start with the identification of a problem in a given sector, then identify a potential solution (hypothesis), and subsequently seek organizations that contribute to this solution.”

Among the team we’ve long been wary of the proliferation of impact investing funds whose portfolio companies are united only by a broad notion of “positive impact” rather than a specific type of change they are working toward.  Our concern is that, without a unifying objective, funds will scatter investments across a variety of issue areas and miss the opportunity to aim significant resources at a specific problem.

Of course, Upaya has developed its own hypothesis – support Small & Growing Businesses that can be large scale employers in ultra poor communities – and are pleased to see that others are starting to bring their own theses into sharp relief. I would certainly point to our friends at Omnivore Partners as a great example of what can happen when a fund pursues clear and measurable outcomes in a specific area (in their case, agricultural supply chains).

In India, “foreign funds are prohibited from investing in debt and, as a result, most of the capital from [foreign] impact funds is deployed through equity instruments. Consequently, small domestic funds are emerging to fulfill the need for early stage debt.”

Accessing affordable working capital debts is a continual challenge for many SGBs in India, including some of Upaya’s partners at various points in their early lifecycle.

For much of the past year, our team has worked with domestic lenders to find creative and effective working capital solutions for our partners. What they are now coming to see that, while smaller domestic lenders are playing a role, these funds still have a big gap to bridge if they are to fulfill the credit needs of SGBs. It is an issue that Sreejith, Tanya, and the team are working hard on, and we are all glad to see this observation in the report.

Seattle Times: Upaya invests in helping India’s poorest of the poor get jobs

Upaya was profiled in the 12 December 2014 edition of the Seattle Times. In the article, Upaya co-founders Sachi Shenoy and Steve Schwartz talk about the organization's evolution, the challenges of the work, and how the Upaya model is changing lives.

Extreme poverty is an unavoidable reality in India. The first time I traveled in the country — as an inexperienced and idealistic 20-year-old backpacker — I was shocked by the families living on the street, the children begging for food, the old women breaking rocks on the side of the road.

I wondered what could be done to help these people — the poorest of the poor. Some travelers gave them money, others didn’t. One (loosely) quoted the Bible by saying “Sarah, the poor are always with us.”

Everyone seemed convinced that extreme poverty was an intractable problem beyond straightforward solutions.

But Sachi Shenoy disagrees. She says these “ultrapoor” just need jobs.

“In India we estimate that there are almost 400 million people living under the extreme poverty line. ... One of the root causes (is) unemployment and underemployment” explains Shenoy, executive director and a co-founder of Seattle-based nonprofit Upaya Social Ventures.

Upaya — which recently received a grant from The Seattle International Foundation, the foundation that funds this column — hopes to address that unemployment by investing in business ventures that have the potential to expand and employ those who otherwise have few, or no employment opportunities.

Shenoy says she was inspired to start Upaya while working for a microfinance organization in Delhi, India. Microfinance is a development approach that lends money to poor people, usually for small-business ventures. She says the microfinance approach tends to focus on the “midlevel poor” — people who made $2 to $4 a day — rather than the “ultrapoor” — those who make less than $1.25 a day.

“There was a cutoff for being too affluent and then there were people we would do surveys on and say, ‘These people are too poor; they’re too much of a credit risk,’ ” says Shenoy, describing the selection process for microfinance applicants. “That’s when my interest got piqued ... If we’re really trying to alleviate poverty, what do we do about the extreme poor?”

Her answer was Upaya, which focuses on entrepreneurs who have ideas with big business (and thus big employment) potential. They offer investment (not loans) with the hope of creating jobs for those often left behind by microfinance.

“You can think of us as the angel funders for small businesses in India,” says Shenoy, explaining that Upaya makes a point of working with entrepreneurs who may have trouble attracting traditional investors or securing bank loans. The investments (usually between $10,000 and $75,000) go to businesses from areas that have a large concentrations of “ultrapoor.”

The goal is to help grow promising businesses with capital as well as mentorship. In exchange, business owners promise to hire the poorest people in their region as jobs are created.

In the past three years, Upaya has invested in six businesses, ranging from a dairy collective to a company that makes “luxury paper” out of rhino and elephant dung, and an operation that turns fallen palm leaves into biodegradable plates. All told Upaya ventures now employ more than 1,100 people in jobs that pay, on average, between $2.25 and $4 a day.

It’s still a tiny paycheck for a tiny percentage of the millions living in desperate poverty. But it’s enough to move those few from that dangerous ultrapoor category to the more stable midlevel-poor group. At this level people can begin to secure housing, eat regularly, keep kids in school and even address chronic health problems — all developments that Shenoy says they’ve seen among workers employed by their Upaya ventures.

Creating stable, decent-pay jobs in some of India’s poorest (and often) rural communities is a difficult business. Shenoy says their first business (the dairy collective) endured religious unrest and droughts in the first year. It was an experience that taught them to think in “contingency plans” and to closely consult with entrepreneurs about specific needs (special accountants to help prevent corruption and bribery, for example).

But it’s worth it to reach those who might not otherwise be reached, says Steve Schwartz, a fellow co-founder of Upaya. For him, the mission boils down to one of simple belief.

“The best way to get someone out of extreme poverty,” says Schwartz, “is to pay them better than someone living in extreme poverty.”

Maybe the “ultrapoor” aren’t such an intractable problem after all.

Sarah Stuteville is a multimedia journalist and co-founder of The Seattle Globalist, www.seattleglobalist.com, a news site covering Seattle's international connections. Sarah Stuteville:sarah@seattleglobalist.com. Twitter @SeaStute

Upaya, Artha Initiative to Co-Invest, Expand Management Resources Available to Job Creating SGBs in India

Upaya Social Ventures and the Artha Initiative are proud to announce that they have formalized a collaboration through which they will work together to develop a pipeline of and co-invest in India’s Small and Growing Business (SGB) sector.

Together the two organizations will deploy seed capital to help these SGBs scale and create employment for the poor, share best practices around sound financial management, and disseminate tools and training for the benefit of India's wider SGB ecosystem.

“In order to promote entrepreneurship in India, the barriers to financial management skill development must be addressed and be paired with improved access to patient investment capital that best meets the entrepreneurs’ needs,” said Artha Initiative Director Audrey Selian. “This partnership does exactly that by improving the access to management resources and seed capital for the next great wave of Indian entrepreneurs,” said Selian.
 
Upaya and Artha have each found that when early stage entrepreneurs receive seed funding and have the resources to master basic financial management practices, their confidence greatly improves and they are far more likely to see a new venture through its tumultuous first year. By equipping entrepreneurs with financial management tools and a roadmap for their use, they have been able to reduce the risk and uncertainty inherent in a new venture and, in turn, attract follow-on debt and equity investment needed to grow the business.
 
Through this collaboration Upaya will share its tools and training materials for dissemination across Artha’s platforms and networks.
 
“Although a number of tools are already available, the uptake by entrepreneurs currently is minimal as most tools are geared towards later stage businesses,” said Upaya’s Executive Director Sachi Shenoy. “Entrepreneurs find the more general templates difficult to adapt to their specific business models,” said Shenoy.
 
In addition to sharing materials and best practices among the two organizations, Upaya will explore co-investments in job creating businesses that participate in the Artha Venture Challenge. Furthermore, Upaya will leverage the Artha Platform, an online community and website dedicated to building relationships between sector participants, to expand the pool of resources available to its partners as they continue to scale.
 
This is the second co-investment and tool-sharing partnership of its type for Upaya, following an announcement earlier this year of a similar collaboration with 3rd Creek Foundation.

Upaya Wins Seattle Met "Light a Fire" Award!

Upaya Social Ventures is honored to announce that it has received a 2014 Light a Fire award from Seattle Met magazine, and is the first ever recipient in the publication's “Acting Globally” category. The Light a Fire awards were created three years ago by the magazine as “a celebration of organizations and individuals who make Seattle – and the world – a better place,” according to the publishers.

Co-Founders Sachi Shenoy and Steve Schwartz accepted the award from the publishers at an event held at Canlis restaurant in Seattle on October 21.

“This is a really exciting opportunity to celebrate this new approach to poverty alleviation and economic development with the Seattle community that has supported Upaya since the very beginning,” said Schwartz.

“It is also a great chance to shine the spotlight where it really belongs – on the entrepreneurs who are building these remarkable businesses and the individuals who are receiving steady employment for the first time,” he said. 

In addition to the award, Upaya is being profiled in the November issue of Seattle Met magazine. The magazine will be on newsstands starting October 25.

Special thanks to longtime supporter Tim Wade for nominating Upaya for this award! 

Bulbul Gupta Joins Upaya's Board of Directors

Upaya is proud to announce that Bulbul Gupta has joined the organization’s Board of Directors.  As the Head of Market-Based Approaches at the Clinton Global Initiative, Bulbul works with corporations, non-profits, government, private citizens, and family foundations that rely on the power of markets and market mechanisms to address social and environmental challenges.

“I'm excited to join the Board of Upaya Social Ventures and support the work of this organization in creating jobs at the base of the pyramid in India, something I'm personally and professionally passionate about," said Bulbul. "I look forward to seeing Upaya further prove out its business model and scale with great impact.” 

Bulbul is based in New York City. For more on Bulbul, please visit www.upayasv.org/board. 

Celebrating Women Leaders

Representing Upaya at the Clinton Global Initiative for a second year in a row, I was honored to meet Secretary of State Hillary Clinton and share with her Upaya’s successful completion of its Commitment to Action — to double the number of jobs in our portfolio over the past year! The timing could not have been better, either, as Secretary Clinton told the assembled members earlier that day that “We need to provide the support systems that enable … the array of opportunities that women at all ages should have.” I was heartened by this statement, and could not agree more when she followed it up by asserting “work is an essential part of one’s purpose in life.”

A common theme during the meeting was the empowerment of women and girls all over the world, and the discussions made me reflect on our own experience as an organization that has now promoted entrepreneurship for over three years in India’s poorest districts.

We’ve seen with our own eyes the power of women in the workforce. A woman who earns is far more likely to provide nutritious food for her family, send her children to school and save for the future.

We have seen the effect that a woman’s job has on her daughters — they start to believe that they too can be productive and more independent when they are older. They aspire to stay in school, reject the notion of early-teen marriage, and collectively perpetuate a virtuous cycle that will lift their communities out of poverty.

Women entrepreneurs are an especially powerful breed — they are fearless, have overcome seemingly insurmountable societal obstacles to pursue their dreams, and run their companies with a devotion and purpose that is infectious. These entrepreneurs are committed to hiring other women, counseling them through their own challenges at home, and providing a safe haven for them in the workplace. Women helping women, women helping girls … it’s a natural rhythm we kick off when we equip just one in a community with the funds and the right tools to start a business. 

Upaya is more determined than ever to identify the women leaders of tomorrow in India and nurture their incredible potential. And after my recent experience, I know we’re not in this alone.

Upaya Partners With 3rd Creek Foundation to Facilitate Knowledge Building, Co-Investment Opportunities

Upaya Social Ventures and 3rd Creek Foundation (3CF) are proud to announce a collaboration through which both organizations will work together to identify, support the development of, and potentially co-invest in Small and Growing Businesses (SGBs) that can create employment for India’s poor.

“We are thrilled to be partnering with 3rd Creek Foundation and strengthening the ecosystem for SGB innovation together,” said Upaya’s Executive Director Sachi Shenoy.

This is a new type of partnership model for Upaya, one that facilitates not just the exchange of ideas and best practices but also opens the door for co-investment in current and future Upaya partners.

“3CF and Upaya share a development philosophy that meaningful employment is key to achieving sustainable poverty alleviation,” said 3CF Executive Director Gwen Straley. “3CF hopes that this collaboration will encourage other foundations and impact investors to take a closer look at the potential that SGBs in emerging markets have to create long-lasting, positive change for those living in poverty,” said Straley.

“While Upaya is often the first investor in a company, we know we can’t do it alone,” said Shenoy, “and by having a channel for co-investment to take place, we can better ensure that early-stage ventures are set up for growth and success.”

3CFis a private family foundation dedicated to helping individuals achieve economic independence. Established in 2007 by Dave and Pam Straley, 3CF supports sustainable development initiatives through charitable grant-making to strong nonprofit partners in impoverished communities worldwide. The foundation seeks to put funds where they will go the farthest and improve the most lives and values projects that take a market-based approach to solving tough social problems. For more information, please visit http://3rdcreek.com/foundation.php and http://www.3rdcreekfoundationblog.org.

Sreejith Nedumpully to Speak at IIMB Vista'14 "Entrepreneurship Conclave"

Upaya's Director, Business Development Sreejith Nedumpully has been invited to speak at the Indian Institute of Management Bangalore (IIMB) Vista '14 "Entrepreneurship Conclave." The event gives aspiring entrepreneurs an opportunity to speak with accomplished leaders in a conversational forum.

Sreejith will join reBus.in Co-Founder Phanindra Sama, BigBasket Co-founder Vipul Parekh, Bangalore Chapter of Mumbai Angels Head Veena Avadhanam, N.S.Raghavan Centre for Entrepreneurial Learning (NSRCEL) professor K Kumar, and filmmaker, author, and entrepreneur Varun Agarwal as speakers. 

Vista'14 is IIMB's Annual International Business Summit and entrepreneurship competition.  The Summit will be held in Bangalore September 26-28. 

Sachi Shenoy Receives "40 Under 40" Selection From the Puget Sound Business Journal

Upaya's Executive Director Sachi Shenoy was recently named to the Puget Sound Business Journal's "40 Under 40" list, an honor that "spotlights the top business leaders under the age of 40 who excel in their industry and show dynamic leadership." 

Below is a profile of Sachi written by PSBJ Staff Writer Steve Wilhelm for the feature, and subscribers can click the link at the bottom of the page to read an extended Q&A.

Sachita Shenoy was brought up by her parents thinking it’s important to open doors for those who have had fewer opportunities in life, especially back in India.

“Our dinner table conversations at home, my father and mother always talked about what can we do to help family members,” she remembered.

The way she created to do that, and at the same time expanded to a much-larger sense of family, is a lesson in individualistic self-creation.

Her Seattle-based Upaya Social Ventures is a unique mix — part venture capital firm, part global NGO — a nonprofit with a mission of creating good jobs for good people in India.

How many jobs?

Upaya’s six businesses now employ 1,200 people in India, and those businesses are rapidly growing, with a promise of hiring many more.

The idea is that while traditional microfinance usually backs tiny one-person enterprises, Upaya backs people with bigger ideas to create larger companies that will hire a lot more people. Now, one Upaya company makes plates out of leaves, another contract with silk weavers.

“Upaya is investing in and building what we’re calling small and growing businesses, and really growing them so they can create jobs at scale. …We’re not talking about a few jobs;we’re talking about 500, 1,000,” she said. “That’s the way to attack poverty, is to create a virtuous cycle of economic development.”

Now and executive director of Upaya, Shenoy had no way of knowing, earlier on, how her life would evolve.

One good thing was that her Indian-born father, a cardiologist, believe she could do anything she chose.

“I had always been raised with this notion of equality. Gender disparity never entered my mind,” Shenoy said. “I never felt I couldn’t do something because I was a woman and not a man.”

Early on, she thought that the route forward would be to earn a lot of money so she could give it away, so she took courses in economics and became one of the first women on the JP Morgan currency trading desk on Wall Street.

But then she started to think there was a better way, and returned to school to earn an MBA.

“If felt like rather than work in finance in Wall Street and make charitable donations, I wondered if I could make much more impact, be more of player than be a check writer.”

So she moved to India to work in the slums of Delhi on microfinance projects, which led to a job with Unitus, then a Redmond-based microfinance company. And so she moved to the Seattle area.

But when Unitus restructured in 2010, she lost her job but saw an opportunity. She and some partners took over some of the contracts and created a new structure, where her company would support larger enterprises, invest in them and help them navigate the early years of growth.

Click here to read an extended Q&A with Sachi (subscription required).

Eco Kargha Receives Funding from Kinara Capital Following Record Sales

Upaya partner Eco Kargha and Bangalore-based Kinara Capital have entered into a working capital debt agreement that will allow the company to meet the demands of a second straight year of a high double-digit sales growth. Terms of the deal were not disclosed. 

“Having worked with Dr. Ravi Chandra and his team since 2012, we are pleased that Kinara Capital is able to provide additional financing to meet the company’s day-to-day business needs,” said Upaya’s Director, Business Development Sreejith Nedumpully. “This deal is one more endorsement of Eco Kargha's growth prospects and a validation of the business model’s ability to positively impact the lives of hand loom weavers,” said Nedumpully. 

Eco Kargha was also recently identified by Unitus Seed Fund as one of the “75 Companies Transforming India’s Livelihoods,” chosen for the company’s “potential for scale and to impact large numbers of Bottom of the Pyramid (BoP) populations.”

What We're Reading August 2014: Summer Breeze

Stanford Graduate School of Business “Does Impact Investing Really Have Impact?” (4 August 2014)

Jyotsna came across this YouTube video of a panel discussion on Impact Investing from the 2013 Social Innovation Summit at the Stanford Graduate School of Business. It led to a good debate around what the merit of impact investment really is, and whether or not it could become a mainstream asset class or another form of venture philanthropy. 

Jyotsna also took pride in noting that Michael Smith from the White House Social Innovation Fund is exhorting exactly the type of evidence-based practice that Upaya holds central to its approach through continually measuring outcomes, refining models, and improving the business program to maximize benefit. He also warns of a trend he sees in investors who seek out innovation by “running after bright shiny objects and creating things people don’t need,” and instead is promoting efforts that are focused on measurably better, outsized positive effects for the public. We couldn’t agree more with this approach.

The Nand & Jeet Khemka Forum Podcast “Artha Initiative: Investing For Impact with Audrey Selian” (August 2014)

Sreejith sent around this great audio interview with Audrey Selian, Director of Rianta Capital’s Artha Challenge in which Audrey hits on some really interesting insights about impact investing. In particular, we felt her comments on sacrificing good investments in search of perfect investments were spot on. She also made some nice points on creating social value in areas where most infrastructure and services are non-existent. Definitely worth the read.

Stanford Social Innovation Review “Fundraising is Fundamental” (26 February 2014)

Laurel sent this piece around to the team in early August. She was struck by the way the authors touted the interesting correlation between forward thinking, innovative nonprofits and discomfort around fundraising.

“The organizations that have the most compelling logic models and the most impressive record of impact (as demonstrated by external impact evaluations) tend to be the worst at raising money—and vice versa ... At many bold and extraordinary nonprofits, people cease to be bold when the topic of fundraising comes up.”

The authors throw out a number of ideas for overcoming this "unfortunate inverse correlation." One strategy is approaching external actors as potential collaborators and passionate partners in the fight to end poverty, instead of as potential funders. This attitude can humanize all players and lead to deeper personal relationships. It also opens up an organization to support in a wider variety of forms - be it moral, in-kind, strategic or material. Of course, she noted that we at Upaya also accept snacks.

Upaya Selected to Join the Aspen Network of Development Entrepreneurs (ANDE)

Upaya is proud to announce that it has accepted membership to the Aspen Institute's prestigious Aspen Network of Development Entrepreneurs (ANDE), a global network of organizations that propel entrepreneurship in emerging markets. Upaya was selected for membership based on its strong focus on job creation through small and growing businesses (SGBs).

The network’s members provide critical financing and business support services to SGBs that create significant economic, environmental, and social impacts in developing countries.

"We are very excited to join ANDE," said Sachi Shenoy, Upaya's Executive Director. "The network has attracted a number of prominent organizations who all believe very strongly in unleashing the potential of small and growing businesses ("SGB's") in developing countries. We look forward to contributing to this important dialogue and partnering with others to make our shared vision a reality.

Members of ANDE include both for and nonprofit investment funds, capacity development providers, research and academic institutions, development finance institutions and corporations from around the world.  ANDE currently comprises over 200 members who collectively operate in more than 150 countries.