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Early value-chain innovators creating new, sustainable input materials using upcycling + recycling methods

1

Operate at the “farm” or “seed” end of the farm-to-consumer value chain and promote ethical farming

2

Environmentally-friendly, sustainable and manufacture better by using more natural raw materials — chicken feathers, hemp, sabai grass

3

Support local livelihoods, fair wages, and skilling to prevent rural-urban migration

Likely to follow a decentralised, New Formal approach
Believe that small is mighty and support smaller clusters
Financing usually linked to incubators or accelerators

  • 'Har Ghar Factory' model

  • Agri-style business approach with many moving parts

  • Work with informal rural communities

  • Partner with SHGs / NGOs to formalise rural communities + ensure better quality of life

  • B2B, impact focused, unlikely to be digitally savvy

  • Bootstrapped with dependency on government programs

  • Support a mostly-women workforce or likely to have an equal mix of both

  • Need access to reliable big-ticket clients and advance orders

  • Require financing of ₹50 lakhs - ₹5 crores ($62,500 - $625,000) depending on enterprise scale

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Business Hardships

  1. Face disruptions due to unpredictable weather, soil conditions, raw-material availability
     

  2. Lack linkages to logistics and other resources in hard-to-reach areas
     

  3. Struggle with front-facing skills like positioning and packaging their brand
     

  4. Need significant tenacity and experience to stay the course
     

  5. Lack established examples of successful business models

Financial Roadblocks

  1. Dearth of investors willing to experiment and be in it for the long haul
     

  2. Lack of trust in government schemes and programs

    • ​Seen as inaccessible, bureaucratic, even corrupt
       

  3. Self-financing is the default — if limiting — option

    • ​Reduces ability to scale quickly

    • Reduces risk-appetite to invest in innovation + infrastructure

    • Unable to attract professional talent
       

  4. Mentors are generous with praise and advice, but often have less capital to offer up
     

  5. Face a massive working capital crunch due to lack of right-fit investment options.

Workforce Concerns

  1. Find it hard to attract dynamic and regular artisan-workers

    • Next-gen artisans prefer easy money and craft is hard work

    • Rural communities do not commit to working full-time when the workstream varies
       

  2. Navigate socio-cultural norms to build long-term trust, thus slower to find product-market and product-impact fit
     

  3. Heavily dependent on skilling and capacity building, thus slower to scale
     

  4. Each geography and community demands context-specific support, thus the model is hard to replicate

“When we started, we did the usual — go to the PMEGP (Prime Minister employment guarantee scheme) but 7 months later the file is still being passed around for approval from one banker to the next. Then I thought — my idea is good, let the market validate. I presented it to startup accelerators. I got selected in KIIT, Climate Collective and IIT Mandi.”
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— K D SHARMA, CO-FOUNDER & CEO, DESCATUK

This category of HCMs is sometimes caught between the “agri” and “craft” verticals and often faces a capital crunch; these HCMs have a significant need for financing across the spectrum but few established success stories to show the way. As such, they are often perceived as unscalable.

“As we work with urban migrant karigars, the high overheads in the city adds to our price, limits the stocks we can carry in both raw materials and finished goods, and impacts the number of karigars we can employ.”

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— ANU TANDON VIEIRA, FOUNDER, THE RETYREMENT PLAN

Skilling & Training
Acquiring Assets
Scaling & Training
R&D
Market Connections
Capacity
Building
Measuring Impact
Working Capital
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Banks

  • Loan interest rates of 12% - 24% p.a. expensive and unaffordable

  • Demand collateral + excessive paperwork

Impact Investors

  • Lack patience needed for the sector

  • Find input-innovators “not impactful enough”

  • Need quick turnarounds + close-to-market rate returns

Institutional Investors

  • Remain inaccessible as smaller ticket sizes and high transaction costs for deploying capital act as disincentives

  • Uninterested as HCMs lack business-speak

Patient, High-Risk

Allows HCMs to develop and streamline product-market + product-impact fit via R&D around new, sustainable products, processes. Input Innovators can catalyse innovation that benefits the sector at large.

Impact-First

Allows HCMs to stay on course to achieve People and Planet goals. 

Collateral-Free, Low-Interest Debt

Allows HCMs to address working capital challenges to build a strong and steady revenue stream.

Non-Financial Support

Allows HCMs to identify and access networks (especially accelerators and incubators), build a better story, and become investment-ready. 

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