Here Comes 'Good' Money ; Venture Capitalists Are Beginning to Chase Unconventional Industries Such As Clean Energy and Social Sector Projects. Why? It's Not Just Socially Responsible, but Also Profitable.

Summary

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Seeking to expand the operations of their ambulance service 1298, Ziqitza co-founders Shaffi Matther and Ravi Krishna were scouting for donations when Vinay Shah of Mosaic Capital, an investment firm, put them through to Jacqueline Novogratz, Founder of Acumen Fund. Novogratz, who was looking to invest in India's health sector, was impressed by Ziqitza's business model based on differential pricing, which meant poor patients paid little and rich more.

More importantly, in a country where revenues of ambulance service providers dependent on carrying the dead, Ziqitza was making a difference to the lives of not just the rich, but also the poor. "We found that in Mumbai, only 6 per cent of emergency patients were being brought to hospital by ambulance," says Matther. So, in March this year, Acumen invested $1.5 million in Ziqitza. "We see India as a laboratory of sorts--it's a market that offers great value in terms of the social equity such businesses, inherently low on margins, generate," says Novogratz.

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Here Comes 'Good' Money ; Venture Capitalists Are Beginning to Chase Unconventional Industries Such As Clean Energy and Social Sector Projects. Why? It's Not Just Socially Responsible, but Also Profitable.

The New York-based Novogratz, who manages a $20-million non- profit fund, is a classic example of what's happening to venture investing globally. Long confined to investing in mainstream businesses, venture capitalists (VCs)--they come in all shapes and sizes--are looking outside to sectors where the seemingly conflicting objectives of profits and social benefits meet. Sectors such as clean energy (ranging from fuels to equipment to devices), healthcare, housing, farming, and it that is aimed at bridging the digital divide.

Globally, the money flowing into green and 'soci...

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