“The base of the pyramid is often ignored, but offers a tremendous opportunity,” says Katie Hill, the India representative of Acumen Fund, an $8 million fund backed by the Cisco Systems Foundation and the Rockefeller Foundation. Acumen has put $1.5 million into Ziqitza, a Mumbai-based ambulance company that offers deep discounts on its service for residents of the city’s vast slums.
Or take IT-rural, set up by a group of software Relevant Products/Services engineers from the south Indian state of Tamil Nadu. A clutch of U.S.-based VCs are circling the startup technology venture, which develops solutions for rural India. The company doesn’t just provide a bunch of computers and conduct basic-training classes, but has a Web site to educate farmers, giving them information about crop patterns, nature of soil, crop diseases, and remedies. IT-rural also has established backward and forward linkages, from buying the seeds to branding and retailing products.
And two California VC funds — Walden International and New Enterprise Associates — are considering a $5 million investment in Novatium, a Chennai-based company that has developed a $100 personal computer. The machine uses microprocessors similar to those found in cell phones, and Novatium hopes to offer a suite of products including Internet connectivity, application software, and services for $10 a month, according to founder Rajesh Jain. Novatium expects to sell 3 million machines, with the potential to reach 40 million households by 2010. Says Alok Singh, CEO of Novatium, “We have always been market-driven.”