Artha Initiative: Investing For Impact | Audrey Selian
Artha Initiative: Investing For Impact | Audrey Selian
“I think that the definition of being likeminded is, refers to a shared vision on risk versus return and the willingness to not sacrifice the good in the quest for the perfect. I feel strongly that there is as yet no real science to the impact measurement element that is at the forefront of all our respective activities in this community of investors.”
In this interview, Audrey takes us through the business model that the Artha Initiative has adopted. She speaks about the reason they chose to invest in India, as well as the many projects they have invested in across India. She mentions Artha’s need to invest in high impact business of providing a product or service that is simply non-existent. Finally she leaves us with a question over the CSR Companies Bill that will leave many in the audience pondering.
Audrey Selian currently serves as Director of the Artha Initiative associated with Rianta Capital Zurich, an investment advisory structure to the Singh family trusts. She is also an advisor to the Halloran Philanthropies, and has been active in the impact investing sector since 2006. Audrey is co-founder of Artha Networks Inc. (ANI), an online impact investment tech platform that is designed as a social network to tackle the economics of due diligence around smaller (impact) investments. The first launch of the Artha was in India, and through ANI the architecture has been licensed to the Inter-American Investment Corporation (IIC) to launch InvestAmericas, a platform focused on SME financing in Latin America.
Audrey has a background in management consulting from PricewaterhouseCoopers, and her entrepreneurial experience includes several years spent in business development, marketing and sales at an NSF-funded software start-up called Wireless Grids. She holds a PhD in Technology Policy & Development Studies from The Fletcher School at Tufts University, and degrees from The London School of Economics and Wellesley College. In 2003-4 she was a doctoral fellow at Harvard University’s Kennedy School of Government.
KHEMKA FORUM PODCAST SERIES: TRANSCRIPT OF THE PODCAST WITH AUDREY SELIAN
INTERVIEWER: TERESA KHANNA, THE NAND & JEET KHEMKA FOUNDATION
Teresa Khanna: Thanks Audrey for joining the Khemka Forum podcast series. We are really happy to have you here, and thanks once again for sparing your time.
Audrey Selian: It’s a pleasure.
Teresa Khanna: Audrey to begin with could you take us through the Business model the Artha Initiative has adopted?
Audrey Selian: Yes Of course. The Artha Initiative is a programme associated with Rianta Capital, which is an investment advisory to the Singh Family Trusts, and we’ve been operational now for about eight years and at its core the initiative is about sustainability. Investment takes the form of equity for the most part, tends to be in the range of fifty to five hundred thousand dollars US. And historically has been in the sectors of energy, livelihoods agriculture and water.
Teresa Khanna: Right, Audrey also it would be interesting to know where the significance of the name Artha Comes from? Is it the Indian equivalent of meaning or is it something else, and also why is the Artha initiative focussed on investing in India?
Audrey Selian: Yes yes so the naming of the initiative and its full credit goes to the founder of the whole programme and the head of the family Tom Singh. The name is actually meant to be interpreted in its definition in the context of one of the pillars of the Hindu religion, and to my understanding refers to a very apt definition of the pursuit of prosperity of sorts as one of the conditions for enlightenment. So sort of material pursuits before the spiritual enlightenment happens. The initiative is focussed on India because the family, the Singh family have their roots in India. And they were very clear from the beginning of the design of the programme that they would be quite agnostic as to what part of the country we would be working in, and supporting enterprise in so long as there were entrepreneurs at the helm of the initiatives.
Teresa Khanna: Since you have already mentioned that the Artha Initiative is already focused on Agriculture, livelihoods, renewable energy. Could you give us some illustrations of the projects you have invested in these fields?
Audrey Selian: Sure, the number of projects is now I should mention increasing because of the Artha Venture Challenge which we have launched, which is a nationwide business plan competition which brings with it some capacity support and some match investment. This programme is sector agnostic so in some ways we have expanded our view, but in the original sector areas that we were looking at some examples I can mention would be, for example Mela, one of our more recent investments effectively an e-commerce platform that caters to and sources artisanal and handcraft products from artisans within India and is running now very successfully as a business that distributes to various kinds of retail doors and outlets, and that systematically provides a good chunk of profit back to the artisans at the root of their supply chains. Another business is Spring Health, a water distribution business based in Orissa, expanding too a few other regions focussed on using a pretty basic chlorination methodology for purifying water and providing safe water for families that would otherwise struggle to find access to it.
Teresa Khanna: You have already reinforced that the Artha is looking to galvanize with likeminded impact investors. What is the criteria that you look for in such investors?
Audrey Selian: I think that the definition of being likeminded is, refers to a shared vision on risk versus return and the willingness to not sacrifice the good in the quest for the perfect. I am not sure if I have got the expression right but I feel strongly that there is as yet no real science to the impact measurement element that is at the forefront of all our respective activities in this community of investors. A lot of this is about working with investors who also are willing to move on the basis of a gut feeling about a team, an entrepreneur and ultimately a product of service offering to a market.
Teresa Khanna: That is quite interesting given that the current discourse is not like that. So going forward what would you classify as a high impact business and up until now what high impact businesses has Artha worked with?
Audrey Selian: High impact businesses to my mind are those who are putting the target segment of the population at the forefront of what they do. So those with high impact are often in the business of providing a product or service that is simply (10:06) non-existent. So we are looking for example at a business like Frontier Markets in Rajasthan bringing to their market a bundle or a basket of renewable energy products in areas that are off grid and that are not electrified, so by virtue of the introduction of the product or service into these areas they are fundamentally transforming the way that families live, that’s students study. So to our mind this is what is considered high impact, those who are pioneering and bringing something new or doing something that exists but doing it so much better. We have another number of examples, similar type businesses like Onergy in West Bengal, like Boond, these are all sort of energy products focussed businesses, and I would urge anyone to have a look at the finalists of the Artha Venture Challenge.com where we have a pretty good profile of those we consider high impact.
Teresa Khanna: Do you think that India has an enabling environment to encourage social entrepreneurs? And who in your opinion are social entrepreneurs or enterprises which show promise which we should be looking out for and perhaps supporting, even if it’s not through financial support, but maybe a spiritual or solidarity support?
Audrey Selian: Yes well I would say that the enabling environment in India, the momentum, the dynamism, the innovation and the number of pioneers I think other countries and other markets pale in comparison to what we see in India today. I have had the great opportunity to be a part of this market for almost the last ten years now and the evolution the concentration of expertise, I mean the sheer scale and scope of the convening’s including not least of which is the Sankalp forum which is now you know expanded to Africa. I would say that the enabling ecosystem and its richness is one of the reasons why we have so many dozens and hundreds and ultimately thousands as they become discovered and placed under pipelines of fantastic small business. Villgro, Innovent, Dasra, the investor communities, the networks like i3N. I mean there are literally hundreds of various players and those that are actually running proper impact funds like Unitus, Unitus Seed, are truly trail blazing I think. So this is a really good time to be a part of this space and sector. And with the venture challenge last year we are opening up the pipelines of the applicants. So if we had 95 applications this year yes we will go through the process of filtering through and picking our finalist, but thereafter we will release the entire list so that those who have appetites for seed stage business, or those who as an incubator are looking for a great network to find people with small pilots underway to work with all of that will be sort of released and made open sourced. So we are trying to do our part in terms of contributing to the enabling environment for social enterprises.
Teresa Khanna: That is truly encouraging to hear and I am sure a lot of people and enterprises in the sector are looking forward to that. Lastly the handbook on your website that are jointly produced by PwC and CII is actually a very well captured document on what the companies bill means for CSR investment in India, in your opinion how do you see this affecting the social enterprise sector?
Audrey Selian: I think this whole topic creates a tremendously exciting potential stream of activity for collaboration. The question remains though how do we systematize the interaction between this vast segment of corporate activity and their 2 percent mandates and ensure that their grant making and their CSR programming is maximally leveraged, so I don’t have an answer but I have a question and I think it’s extremely exciting.
Teresa Khanna: Indeed. So thank you so much for your time Audrey.
Audrey Selian: Thank you.
Views expressed here are solely that of the person interviewed and may not represent the views of The Nand & Jeet Khemka Foundation.