When one speaks of startups; consumer web products, high-tech apps, and enterprise software is what one imagines. Building and scaling technology companies is not very time and capital-intensive, two guys from their garage can take over the world. While this is important, entrepreneurs in developing countries shouldn’t forget about the numerous people in their country without access to basic services such as education and healthcare.Impact investing doesn’t need to be not for profit but rather in businesses that make a meaningful grassroot change along with generating profits. Aspada Investment is a VC that has been started by Thomas Hyland and Kartik Srivatsa to invest in such businesses. We got in touch with Thomas Hyland to learn more.
YS: Hi Thomas! Tell us a bit about yourself to start off.
Thomas: Hello! Well, I’ve been in India from 2008 but before that as well and I’ve had a great time here both personally as well as professionally. I spent a couple of years of my life in 2005-2006 globe trotting and out of those two years, I spent close to an entire year in India, traveling the length and breadth of this fantastic nation.
I had worked with Goldman Sachs in San Francisco before becoming one of the first employees of SeaChange Capital Partners, an innovative social sector financial intermediary. I then came to India to get my MBA from ISB, Hyderabad and have now founded Aspada Investment Advisors with my partner Kartik.
YS: Tell us about the fund.
Thomas: We recently received a $10 million commitment from the Soros Economic Development Fund (SEDF) to work to promote economic opportunity and sustainable impact in India. We look at areas like affordable healthcare, affordable education and agriculture. We’re a small team and we intend to stay this way. We’ve just made our first investment in Lawrencedale and will make about 2-3 investments every year and these will generally be in the sub $2 million zone. We work very closely with our companies and enter the deal with a long-term view.
YS: Oh great! So what does LEAF do?
Thomas: The company is called Lawrencedale Agri Processing (leafooty.com). LEAF works with small holder vegetable farmers in South India and provides technical support and market linkages. The company works with farmers owning less than two acres of land and improves income realizations through yield improvements, productivity increases, and consistent produce pricing.
YS: How do you see the social impact investing space? Which are some of the gaps that need to be plugged?
Thomas: Looking at the entrepreneur space in India over the past few years, I’ve noticed that many VC’s operate in the strictly technology space. While that is important, I feel that for a nation like India, you need more investors willing to grow businesses in nuts & bolts, brick & mortar areas. The exits are more difficult in these spaces and it takes a longer time to prove the economics, but it’s a long-term game and is much more meaningful for the nation at this point.
YS: If someone were to startup in any of the spaces, what suggestions or caveats would you give?
Thomas: All said and done, working in these areas require a lot of on the ground hard work and endless patience. You can’t sit in the metros and be thinking of building a company that operates at the last mile, you should be willing to travel a lot and get your hands dirty. The other thing is that it is always better to have some background in the sector you’re entering, or to build a team with strong domain expertise. Passion is important but these sectors are complicated and require time and endless perseverance to before you begin to see results.