How venture capital firm Hearth Ventures is reviving business in Indian arts and crafts

India’s rendezvous with art began when few civilizations existed. Some of the oldest crafts in history can be traced back to India and its neighboring regions – and much of it has been passed down from generation to generation and exists today.

Unfortunately, more and more Indians craftsmen and craftsmen – whose ancestors once enjoyed the patronage of royal families across the country and saw their crafts adorn palaces and durbars — exchange their skills and practice for lack of a better life, thanks in large part to the emergence of mass production.

Add to this a growing internet culture and digital lifestyle, most Indian artisans – who are far removed from today’s technological advancements – have been left behind.

Traditional Indian art is slowly dying.

COVID-19, in particular, has left thousands of artisans out of work and unable to make ends meet. Exports of Indian handicrafts have leveled off since the start of the pandemic, while local production took a hit as more and more people turned to online shopping. Government efforts to revive the handicraft economy have paid off, but given that India’s handicraft sector is the country’s second largest earner, more action is needed.

Enter Inasmuch asHearth businessesInasmuch as – an impact venture capital firm that specifically seeks to invest in companies that support Indian crafts and arts, as well as circular economy businesses.

(Image source: Pixabay)

The venture capital firm was founded in 2021 by Shefali Chhachhiwho has worked with and developed start-ups including Pepsico, Nokia, Max BUPA and McCormick Kohinoor; Vinayak Kamath, a BITS Pilani alum who has been a partner in private equity funds and has worked at multinationals such as Arvind Mills and GE; and Vipul Jain, formerly at IIM-Ahmedabad and IIT-Kanpur, and Chairman and Co-Founder of Kale Consultants which now trades on the NSE as Accelya, and Kale Logistics, a software company focused on the global logistics industry.

The trio aims to “reinventing Indian craftsmanship”, to bring India’s handmade artisan products to the global market and thereby support craftsmen and craftsmen in rural India.

“After agriculture, handicraft is the second largest employer in rural India. While evaluating our thesis at the start, we realized that there was a serious lack of growth capital, as well as business mentorship, in this sector, and we decided to solve this problem”, says Shefali Your story.

“We want to play the role of a “mentorship fund” in the Indian arts and crafts sector, and we are convinced that there is a huge opportunity for success in this field,” she adds.

Invest in Bharat

Hearth Ventures primarily invests in companies that end up impact and Support the craft and artisanal community.

It breaks down the types of businesses it assesses for investments as follows:

  1. Based on product: Companies specializing in products such as furniture, lighting, pottery, wall art, kitchenware, giftware, accessories, etc.
  2. Facilitators: Companies that enable the sale of Indian handicrafts, such as e-commerce wholesalers, logistics companies, project companies, technology companies, etc.
  3. Sellers: E-commerce retails, retains chains, marketplaces, distributors, and international sellers, among others.

Companies that fall into one of these categories are those that Hearth Ventures is most interested in working with, although its North Star is still the impact these companies have craftsmen and craftsmen.

(Image credit: Pixabay)

“One of our main criteria, when evaluating a business for investment, is the impact it has on the artisan and craft community. We work backwards from the UNSDG indicators ( United Nations Sustainable Development Goals) to see how many of those boxes the company ticks, and what the extent of the impact is,” Shefali says.

Other key criteria for the venture capital firm are unity entrepreneurial talent, economy, scalability (which includes the size of the addressable market), how it adapts in the company’s portfolio and evidence of potential success, among others.

The company doesn’t just provide capital — it also provides business mentoring and hopes to help its portfolio companies explore connections with each other.

Hearth Ventures currently has a startp in his portfolio — based in the United States Inasmuch asShobitamInasmuch asInc — in which she invested $1.27 million. Founded by Aparna and Ambika Thyagrajan, Shobitam works closely with weavers in India.

During the pandemic, when its weaving community was hit hard, the startup took responsibility for providing rations such as rice and lentils, and pledged half of its April earnings to weavers and their families.

the Mumbai-based venture capital firm is in the process of close two other transactions in March 2022, and is is looking to make three more investments over the next two quarters. Its average ticket size for funding is $200,000 to $1 million, and, while his funding at Shobitam came from owner capital, it is a larger fund to explore more space investment opportunities.

Edited by Saheli Sen Gupta

Laura J. Boyer