Mahindra Finance using CSR money to fund social startups SustainEarth and Sickle Innovations

PUNE: Non-banking financial company Mahindra Finance is funding two social enterprises through its corporate social responsibility fund, after the new Companies Act amendment allowed investments into startups through incubators to fall under the CSR purview.

The company has partnered with social venture fund Villgro to fund SustainEarth, and with the Indian Institute of Management-Ahmedabad's Centre for Innovation Incubation and Entrepreneurship (CIIE) to fund Sickle Innovations.

Mahindra is investing Rs 20 lakh to Rs 23 lakh in these companies. SustainEarth supplies biogas systems and Sickle works on improving conventional farming through innovative appliances.

"We have been actively focused on the rural sector through CSR initiatives. After the Company Law amendment, we were looking to engage with a social enterprise focused on rural areas, and we found Villgro and CIIE to be the right partners for this," said Vishal Bhanushali, manager-CSR, Mahindra Finance.

Mahindra also plans to help these startups find customers and scale up through their network. "Their network and access to rural population will be of immense benefit to us," said Koushik Yanamandram, cofounder of SustainEarth.

Yanamandram started SustainEarth along with Piyush Sohani in 2013, as a masters student in The Energy & Resources Institute (TERI). They have designed a biogas system, ‘Gaugas', which includes a plant, pipeline and stove. SustainEarth received initial funding ofRs 10 lakh from Villgro as an incubatee.

"We have concluded with our prototypes in Andhra Pradesh, and in Karnataka, we are partnering with Sri Kestra Dharmasthala Rural Development Project to supply biogas systems to villages.

We plan to cross more than 100 biogas systems soon, and by 2015-16 we aim to sell 2,000 biogas systems every year," said Yanamandram.

Sickle Innovations is looking to use its funding to scale up operations and invest in research.

Nitin Gupta, who started the company in 2014 with Vinay Reddy after quitting from the Indian Space Research Organization, is focusing on two products – cotton plucker and fruit picker— aimed at small farmers.

"We are working in the rural belt in Maharashtra, Gujarat, Punjab and Andhra Pradesh. We are aiming to supply 1,000 cotton pluckers this season, which will help cotton farmers to pluck cotton and deposit them in a non-contaminant manner, while ensuring faster plucking," said Gupta. Sickle has totally raised Rs 50 lakh through another institutional investor and an angel, besides Mahindra Finance.