Nandan Nilekani commits 5% assets to start-ups

Invests $50 mn in 11 entities in just over a year, commits $25 mn more; prefers putting money in firms trying to solve India-specific problems

He started late as an angel investor but Nandan Nilekani, the man behind Aadhaar and a co-founders of Infosys, has invested $50 million in 11 start-ups in just over a year and has committed to invest $25 million more.

"Investing in start-ups helps me keep my business brain active and these businesses overcome challenges of scalability," said Nilekani. During his tenure at Infosys and in the government, he did not invest in any other technology company.

Among the major entrepreneurs putting their money in start-ups, Ratan Tata has invested in 16 this year, Mohandas Pai has invested in nine, Shaadi.com founder Anupam Mittal has done eight deals, while Nilekani and Google India Managing Director Rajan Anandan have done seven deals each. Indian Angel Network leads the table with 21 deals.

Unlike most angel investors, who typically put in small sums - Ratan Tata invests only $100,000-200,000 - Nilekani has signed bigger cheques and is committing even more. He will invest five per cent of his assets in start-ups, he says.

"The success of Silicon Valley is because of entrepreneurs who reinvested in start-ups and helped them with skills, capital, knowledge and expertise," says Nilekani. He feels the start-up ecosystem in India is widening, with family offices and second-generation entrepreneurs taking to investing.

Nilekani's investments include 10i (ShopX), which brings small retailers to the same level in technology, logistics and supply that organised players enjoy; Fortigo Network Logistics, which is aggregating truckers; Sedemac Mechatronics, which has developed a smart ignition for two-wheelers; and Rail Yatri, which uses crowd-sourcing, GPS and analytics to predict the arrival of a train at any platform accurately.

"Many of them are trying to solve India-specific problems, many are aggregation plays or using a platform that provide smaller businesses access to a wider market," says Nilekani. He doesn't want to invest in anything that is linked to Aadhaar or financial technology.

He doesn't invest in education but has a philanthropic interest. Nilekani has invested $10 million in EkStep, a not-for-profit initiative that promotes primary education.

Co-founded by Nilekani, his wife Rohini, and Shankar Maruwada, the NGO has scaled up across four states while its app is used by over 100,000 children through partners like Pratham.

Last week, Nilekani teamed up with Ratan Tata and former finance secretary Vijay Kelkar to start a microfinance company, Avanti Capital. Tata and Nilekani are investing their respective philanthropic capital and any gains will be reinvested in philanthropic causes.

Nilekani has made many philanthropic donations since 1999. He is funding the Indian Institute of Human Settlement (Rs 50 crore), a public university coming up in Bangalore that will study urban-centric issues. He is also the president of the governing body of the NCAER and is funding its new building (Rs 50 crore).