The phenomenal success of SKS Microfinance IPO reaped huge gains, not only for its promoters and the senior management team, but also, for its investors. Billionaire venture capitalist and the cofounder of Sun Microsystems,Vinod Kholsa one of the early investors in SKS Microfinance, personally gained $117 million from the company’s recent listing on the Bombay Stock Exchange. In an unexpected move, Khosla is now putting back SKS gains for ventures aimed at fighting poverty.
According to a report in New York Times, Khosla, recently named among Vanity Fair’s 100 “most influential people of the information age”, plans to start a venture capital fund to invest in companies that focus on the poor in India, Africa and elsewhere by providing services like health, energy and education.
Combining the dual objectives of fighting poverty and making a profit, the VC fund will aim at making investments in sustainable businesses. The NY Times report quoted Mr. Khosla as saying, “There needs to be more experiments in building sustainable businesses going after the market for the poor." Khosla asserted his point of view that global poverty can be eradicated through business, rather than through the state or non-profit organisations.
There are also other funds like Omidyar Network founded by EBay Inc. founder Pierre Omidyar which target such similar objectives. The philanthropic investment firm invests essentially in microfinance, education and such sustainable businesses in the countries of India and Africa. New York based Acumen Fund with a significant presence in India also invests in businesses making social impact.
Khosla Ventures, the investment arm anchored by Vinod Khosla has made one direct investment in India- a $3.35 million in an electrical utilities company, Sunborne Energy Technologies Pvt. Ltd. He also invested in Grama Vidiyal Micro Finance Limited (GVMFL), a Tamil Nadu based microfinance institution, through his non profit private foundation, Amar Foundation.