Silicon Valley’s Midas Vinod Khosla helps poor in native land
Billionaire venture capitalist and co-founder of Sun Microsystems Vinod Khosla was already among the world’s richest men when he invested a few years ago in SKS Microfinance, a lender to India’s poor womenindia Updated: Oct 06, 2010 23:58 IST
Billionaire venture capitalist and co-founder of Sun Microsystems Vinod Khosla was already among the world’s richest men when he invested a few years ago in SKS Microfinance, a lender to India’s poor women.
But the roaring success of SKS’s recent initial public stock offering has made him richer by about $117 million — money he says he plans to plow back into other ventures that aim to fight poverty while also trying to turn a profit.
At current prices, his 6 per cent stake in SKS is worth about $120 million.
An Indian transplant to Silicon Valley, Khosla plans to start a venture capital fund to invest in companies that focus on the poor in India, Africa and elsewhere by providing services like health, energy and education.
By backing businesses that provide education loans or distribute solar panels in villages, he says, he wants to show that
commercial entities can better help people in poverty than most nonprofit charitable organisations.
He has already been investing in companies that he says fit his model of profitable poverty alleviation. One is MokshaYug Access, which sets up milk collection and chilling plants to help dairy farmers. The company says it helps farmers reduce transportation costs and get higher prices for their milk than they can with local distributors.
“There needs to be more experiments in building sustainable businesses going after the market for the poor,” he said in a telephone interview from his office in California. “It has to be done in a sustainable way. There is not enough money to be given away in the world to make the poor well off.”
Khosla has another motive, too. He wants to goad other rich Indians into giving away more of their wealth.
“It surprises me that in India there is not a tradition of large-scale giving and helping to solve social problems and set a social model.”
Microsoft co-founder Bill Gates who was in China last week with billionaire investor Warren Buffett, said on Thursday that he and Buffett might go to India as part of their campaign to get the rich to give away half their wealth.
Khosla said his experience with microfinance had helped shape his views on the best way to tackle poverty.
He has invested in commercial microfinance lenders and has donated to nonprofit ones, and he said that moneymaking versions had grown much faster and reached many more needy borrowers.
The New York Times