TOP OF THE PYRAMI
D 2016 | Kotak Wealth Management
Mr Nagaraja (Naga) is an angel investor, impact-investment specialist, and a member of the Indian Angel Network.He spent 16 years (1996-2012) with CDC Software, most of it in the US, from where he left as President, South and Southeast Asia. In 2012, CDC was sold to a private equity firm, and Mr Naga decided to take a break from a flourishing career and do something completely different. The seeds of this ‘something different’ were sown almost 13 years ago; in 1999, he and his team had raised money for a group called Association for India’s Development, which was used to support NGOs in India.
He served as the group’s president for a while and spent time in India, particularly in India’s villages when he realised that he fervently wanted to contribute to the country’s social upliftment. However, it was not until 2012 that he could whole-heartedly pursue his heart’s desire. From 2012, he has been a partner at Acumen
Fund, which invests patient capital in businesses whose products and services enable the poor to transform their lives. This US-based company was started by entrepreneur and investor Jacqueline Novogratz in 2001. Acumen has invested more than US$88 million in 82 companies across Africa, Latin America, and South Asia. Mr Naga joined Acumen with the idea of bringing in the efficiency of a corporate into the heart of an NGO. Besides Acumen, he is a part of the Indian Angels Network, and the founder Chairman of Native Angels Network, a board trustee of Nativelead Foundation, a non-profit organisation promoting innovation-based New Age entrepreneurship. He is also on the board of several social-enterprise companies. In his career as an angel investor, he has invested in 18 startups in the impact investing space. His investment philosophy rests on what he calls the 3Ps – profit / planet / people. “As an investor, my main interest is profit. But as this is an impact investment, there is a longer grace period – so this is called patient capital,” he says.
Mr Naga was instrumental in making the Indian Angel Network look at companies other than IT for investments. As part of IAN, he urged fellow investors to look at companies in the social space he believed that even though this space requires more time and effort, it has good potential. This led to the launch of IAN Impact, which is focussed solely on impact investments. Its first venture was GoCoop, India’s first social marketplace to buy and source handmade apparel, home furnishings, fabrics, and crafts directly from co-op weavers and artisans.
Initially, only 40-50 IAN members supported the GoCoop concept, but ultimately all 350 came on board, which eventually fuelled investments in Uniphore (company that allows software to understand and respond to natural human speech in many languages), Saahas (organic waste management, collection and recycling of packaging waste and e-waste), and Freshworld (a farm to home FnV using electric smartcards). In fact, Saahas, he recalls, was an NGO. It took a push from Naga and his portfolio consultant company for Saahas to realise that it did not have to remain an NGO – it could become a sustainable social enterprise rather than depend on donations for growth – and perhaps make a bigger difference to people’s lives.
All his investments are in the impact space right now in the `50 lakh to `6 crore bracket with the average investment ‘sweet spot’ at `3 crore. He calls this space “high risk and high return”. Naga has invested in 18 companies and is sitting on a 4X appreciation right now while some are at 5X-13X return. 15 are doing well and 3 are not doing well. He reinvests his returns, he says. He believes that there is ‘political will involved’ in renewable energy in India and sees a bright future for this sector. He served as the group’s president for a while and spent time in India, particularly in India’s villages when he realised that he fervently wanted to contribute to the country’s social upliftment. However, it was not until 2012 that he could whole-heartedly pursue his heart’s desire.
From 2012, he has been a partner at Acumen Fund, which invests patient capital in businesses whose products and services enable the poor to transform their lives. This US-based company was started by entrepreneur and investor Jacqueline Novogratz in 2001. Acumen has invested more than US$88 million in 82 companies across Africa, Latin America, and South Asia. Mr Naga joined Acumen with the idea of bringing in the efficiency of a corporate into the heart of an NGO. Besides Acumen, he is a part of the Indian Angels Network, and the founder Chairman of Native Angels Network, a board trustee of Nativelead Foundation, a non-profit organisation promoting innovation-based New Age entrepreneurship. He is also on the board of several social-enterprise companies.
In his career as an angel investor, he has invested in 18 startups in the impact investing space. His investment philosophy rests on what he calls the 3Ps – profit / planet / people. “As an investor, my main interest is profit. But as this is an impact investment, there is a longer grace period – so this is called patient capital,” he says.