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Artha Platform, closed social enterprise version of Angel List, announces Challenge

Pic courtesy arthaventurechallenge.com
Pic courtesy arthaventurechallenge.com

This post was supposed to be about Artha Venture Challenge (AVC) – a call for applications from social ventures across India operating in the sectors of Agriculture, Energy, Water, and Livelihoods. Up to 15 winning enterprises get the opportunity to pitch for up to INR 25 lakh (USD 50K) of funding. Ennovent, an early stage social impact investor and AVC’s partner, alerted me and there are more details below but first a little about Artha Platform – underwriter of the AVC.

The Artha Platform website has the following intriguing verbiage.

The Artha Platform (or “Artha”) is an online community and website dedicated to building relationships between impact investors and donors, and social entrepreneurs and capacity building support organizations (all “Sector Participants” or “Artha community”) working on or in India. It is an independent initiative supported by Rianta Philanthropy Ltd (“Rianta Philanthropy Ltd.” or “RP Ltd.”).

There’s very little public information about Rianta Philanthropy — sounds like a family-run organization. The section titled How the Artha Plaform works is even more interesting – I’ve cherry-picked some extracts (emphasis is all mine).

  • Artha offers a closed, secure space for all Sector Participants keen on supporting the work of small and growing enterprises in India.
  • “invitation only”, and there is no fee to join.
  • Investors seeking to gain greater understanding and comfort with enterprises listed on the project pipeline may work with these 3rd Parties or alternatively choose to complete Due Diligence themselves.
  • Activity on the Artha Platform is undertaken within a small cluster of practitioners who tend to know one another and who work closely together; disclosure regarding progress on contracted due diligence activities is thus a fundamental basis for the operation of the website, and is based on an ‘honor code’.

This Artha blog post refers to a $40,000 grand prize they awarded to Eram Scientific, maker of the innovative automatic public toilet “Delight”.

If you haven’t heard of AngelList yet, this Pando Daily post describes how a crowdfunding pioneer (Rally.org) raised a whopping $7.9 Series A round on AngelList (a crowdfunding VC platform). Talk about a recursive play!

If you are still not convinced about the disruptive force of AngelList, may I suggest an alert reading of Mike Greenfield’s How AngelList changes the investing game? For now, I’ll leave you with just this closing teaser from his post:

But the effect on the investor pool is clear. As AngelList and crowdsourcing grow, the impact of the old boys’ clubs will shrink. For companies, the pool of investors is growing.

Artha Venture Challenge Details

The twist to the Artha Challenge is that the cohort of social entrepreneurs don’t automatically get 25 lakhs. It’s contingent upon them securing a co-investment from the pool of Artha Platform investors. So whatever amount the entrepreneur ends up raising (up to 25 lakhs) is matched by the platform. In programmatic precise terms, 3 distinct scenarios exist for the entrepreneur:

  • Successfully raise 50 (25 + 25) lakhs
  • Raise an amount less than 25 (e.g. 10L) so total amount raised = 20 lakhs
  • Unable to raise anything in which case they get no matching funds from Artha Platform.

According to this exhaustive FAQ, the investment from platform investors is either loan or equity while the matching investment from the AVC would be equity — to be determined on a case-by-case basis.

Key Dates

  • Applications open: April 17th
  • Applications close: June 17th
  • Initial assessment: June 18th to July 7th
  • Due diligence phone interviews: July 8th to August 8th
  • Final interviews: August 11th – 31st
  • Artha Venture Challenge cohort announced: September 1st