Our latest investment, Haqdarshak, is our first investment in India, and our seventh investment out of the Financial Health Innovation Fund, which invests directly in early-stage, financial health startups. Funded by the MetLife Foundation and managed by Village Capital, this fund was established to achieve both impact and financial returns, sending a powerful market signal that foundations can use different financial tools to seed the innovation economy.
We couldn’t be more thrilled to share why we invested in this one-of-a-kind startup that is expanding access to social welfare services across India.
Introducing Haqdarshak
Founded in 2016, Haqdarshak (which translates to ‘guide to your rights’ in Hindi) enables Indian citizens to access government welfare schemes (social welfare and benefit programs) through its digital platform and agent network. Haqdarshak is not new to Village Capital, having participated in our 2017 Civic Tech India Accelerator. Additionally, the CEO and co-founder Aniket Doegar is currently serving on the Advisory Board of our Financial Inclusion for Migrants program.
Since founding Haqdarshak, Aniket has received wide-ranging recognition as an Acumen Fellow (2018), Forbes 30 Under 30 Asia social entrepreneur in 2019, Unreasonable Fellow 2022, and currently a Fellow at the 2023 Schwab Foundation for Social Entrepreneurship. The startup also recently pitched and secured a deal in the popular TV show, Shark Tank India.
Although we’re familiar with the startup and its leadership through our program, due diligence is an important step in any investment decision we make. Typically, the standard evaluation process includes collecting information on a startup’s risk and growth opportunities, and assesses its team’s potential to scale the startup. We undertake a similarly traditional due diligence process meeting with the founders and senior leadership, reviewing financials and other diligence materials, as well as speaking with customers and investors. We share more on how investors can develop a consistent evaluation framework within this report and implementation guides.
What makes our process unique is that we are able to leverage the local knowledge and expertise of our globally distributed team. For this investment, Sr. Programs Associate, Ayush Shukla, who manages our programmatic work in South Asia and is based in Mumbai, was able to help our investment team by providing critical insights into the problem Haqdarshak is solving for Indian citizens and visiting one of their sites in person.
Ayush traveled to one of Haqdarshak’s Yojana Kendras, a small office set up to help hard to reach individuals prepare and apply for social services in the Talasari (a town of 43 villages) in the district of Palghar, Maharashtra. During this visit,Ayush metwith center coordinators, previous beneficiaries, and new applicants in the village - to get a sense of how well the startup works on-ground and its impact within the communities it serves.
“The center coordinators were previously agents with Haqdarshak for 1-3 years and had gained considerable experience working with the local community as well as government stakeholders,” shares Ayush. “The majority of the agents and staff are women, who usually in Indian society, tend to mainly engage in domestic activities. They were very happy to be working with Haqdarshak as it gave them a chance to achieve financial independence, help their local community members, and boosted their confidence.”
In addition to leveraging local knowledge and the due diligence process shared above, we also took the following into consideration with this investment decision:
1. The Problem
India has many government welfare programs ranging from agriculture to healthcare, housing, and pension schemes, small business loans, women empowerment initiatives, and education access - all intended to enhance the quality of living and enable sustainable economic growth for the underserved. India has thousands of schemes across national and regional governments, however, these schemes are often under-utilized and do not reach their intended beneficiaries, mostly because they are unaware they qualify, or are unable to apply due to low levels of literacy and access to digital services. For example, over 55% of funds dedicated to a welfare scheme for construction workers remain unused.
While the government often runs awareness campaigns for schemes, they are not designed to offer personalized application support. As a result, many low-income Indian citizens are missing out on valuable benefits that could meaningfully improve their lives.
2. The Solution
Haqdarshak is working to ensure that Indian citizens have the information and guidance they need to access these welfare benefits. The startup has built a database that houses over 8,000 government welfare schemes and a network of guides called Haqdarshaks’, 80% of whom are women, who help individuals gain access to the appropriate schemes.
Haqdarshak not only empowers citizens to access funds that are rightfully theirs, but also provides ongoing livelihood opportunities for the Haqdarshak workers.
3. Social Impact
Haqdarshak provided a compelling impact case; connecting low-income Indian citizens and MSMEs with government benefits promoting economic mobility, improving health outcomes, and more. Their model also improves the livelihoods and economic mobility of its 24,000 strong agent network, most of whom are women.
To date, the startup has:
With over 360 million Indians living in poverty, Haqdarshak expects to reach 100 million individuals in the next five years.
4. Financial Viability
Haqdarshak’s model monetizes through partnerships with corporations, employers and financial institutions to provide services to some of the country’s most vulnerable populations. In 2022, the startup launched two new elements to its model: the Yojana Card, a digital or physical card that provides a welfare user profile and links welfare scheme income to a bank account, and the Yojana Kendra, a village or city kiosk where applicants can walk in to access Haqdarshak services and cards.
Though Haqdarshak will charge individuals small set up fees for the Yojana Card, the company’s primary revenue driver is not off the backs of the individuals they seek to support and allows the company to establish trust with their users. This approach is innovative, impacts the most disadvantaged, and ensures sustainable outreach to these populations.
As impact investors, we want to ensure that a startup’s target beneficiaries are sufficiently benefitting from a company’s services and that they aren’t being taken advantage of. Because Haqdarshak’s model is contingent on building trust with their beneficiaries and because we have seen Aniket’s long term commitment to impact and centering the needs of their beneficiaries, we felt comfortable with their approach.
They have established a clear path to scale and profitability.
What Next?
Through this pre-Series A investment round Haqdarshak will focus on platform enhancement, hiring, and building out the Yojana card features to establish a stronger presence in the communities, and manage their agent networks.
For more information on Financial Health Innovation Fund and our portfolio companies, contact meredith.storton@vilcap.com.
