Articles by Raj Kundra

Today is Blog Action Day, an annual event that unites the world’s bloggers in posting about the same issue on the same day with the aim of sparking discussion around an issue of global importance. This year’s issue is climate change.

Climate change – important topic. Glad to see that we are now all looking ahead and considering how our actions will permanently impact climate, how we will impact the lives of our children and grandchildren. And if we act now and cut back it is not too late to make a difference for them.

But what about the poor? The developing countries? Sure, they benefit if we save the planet, but is it fair that we are asking them to also cut back with us to help solve the climate problem? After all they don’t have a teenager with a Camaro to give up, or a roadtrip in a Winnebago to trade in. And they are now paying $4/gallon for gasoline because the rich countries used most if it up when nobody was looking!

If we want the billions of poor along, we have to help. We talk about carbon credits for developing countries to ease the transition. We have to make this real - and easy. We talk about using modern cleantech solutions that will create new and affordable energy for the world’s poor – but we have to make this accessible AND affordable. We have to help build businesses to deliver these solutions. This will be hard, it will take a long time, and we might not get rich doing it. But that is what it will take.

We’re seeing potential to bring real cleantech solutions to the developing world through our energy portfolio at Acumen Fund. High-efficiency LED lights powered by solar panels, small hydro to drive village electrification, bioenergy from agricultural waste residues are examples of initiatives that we have supported. These solutions can make a difference – both to address local poverty AND to save the global environment.

One of those solutions, Acumen Fund investee D.Light Design, is a nominee for the 2009 People’s Design Award for its newest product, a super cheap solar lantern that provides an affordable and clean replacement for kerosene lighting in rural India and Africa.

As part of National Design Week, the Cooper-Hewitt National Design Museum is sponsoring the competition in which good design is chosen by the public.

Want to help? Please vote for D.light here and spread the word to your networks and friends. You have until October 20 at 6:00 p.m. EST to vote. The winner will be announced live at the National Design Awards gala in New York City on October 22.

The team at Acumen Fund would like to take a moment to congratulate Christine Eibs Singer on her promotion to CEO of E+Co, one of our friends and allies in the social investment space. At the same time, we want to applaud retiring CEO and E+Co founder Phillip LaRocco. They have both shown incredible vision in starting E+Co and proving to the world that small enterprises can deliver innovative solutions to the world’s neediest if they are supported in the right way. They have also been terrific collaborators with us in renewable energy which has been a new focus area for us at Acumen. Congratulations again to the entire E+Co team and especially Phillip and Christine.

The New York Times ran a fascinating article last week about the multifaceted impacts of third world stove soot: “Third World Stove Soot is Target in Climate Fight.” Author Elisabeth Rosenthal deftly explores the intersection of poverty, health consequences and the environment through the lens poor customers’ cooking habits. 

The problem of inefficient, smoky stoves is one Acumen Fund is trying to develop a solution for – but it’s been elusive.  Low-income people cook with wood that, while laborious to find, is still relatively plentiful and free.  (An exception here is Haiti, which has been ravished by deforestation caused by villagers and city-dwellers denuding the countryside in search of wood.) Those interested in a new approach might want to check out MIT MacArthur Fellow Amy Smith, who has been working on the charcoal issue.

Yes, the stoves are a problem – but this is not simply a technological issue. There are lots of stove technologies – rocket stoves, solar cookers and the like – out there that can do the job better and use cleaner fuels, but the capital costs are higher and the distribution models are complex. Incentives from the carbon markets may be part of the solution, but they have not provided enough benefit to drive the adoption of clean cooking products on their own. Even more, getting certified through the Clean Development Mechanism of the Kyoto Protocol is a long and complicated process, a real barrier for start-ups interested in attacking the stove problem.

We are committed to finding a solution here, and welcome any suggestions or thoughts as we move forward.  These stoves, along with the lack of lighting, are really the two biggest energy issues faced by the poor today.

I’m just back from three weeks in India including several days with the D.light team in Noida. It’s so exciting to see the team in action. In a year they’ve built a global organization in India and China and have built real teams around sales, product design, manufacturing, institutional relationships, etc. And I also got to see Acumen Fund fellow Heidi Krauel in full swing in Business Development where she is helping the CEO Sam Goldman think about all the strategic opportunities in front of the company and how to really execute on the right ones.

Really a different approach to creating lighting solutions for the poor and completely based on the premise that if they focus on the preferences of the (poor) consumer with world-class execution that this will quickly scale in a way that hasn’t happened in the past.  And it is great to see support of their approach in the media, like this recent NY Times article.

But what really has us excited is the excitement at the consumer level.  If you have a chance, visit D.light’s website to see hear some of the remarkable stories of their customers and how light has impacted their lives. And also take a look at the letter that D.light just received from a resident in Orissa living in D.light’s first 100% solar village. We’ve got thousands and thousands of villages to go, but a very exciting start.

With all the talk of rising oil prices and the potential of biofuels, I’m asked almost daily: When will Acumen invest in biofuels? Usually, the inquiry is more specific: When will we invest in jatropha based biodiesel in East Africa?

Acumen has looked at (and is considering) several opportunities, but we have found that there are some very challenging questions around the impact of biofuels that are almost impossible to answer. For example, jatropha is often touted as a biofuel “superplant,” as it appears to survive in marginal, semi-arid land of which there is plenty in Sub Saharan Africa. But the amount of oil that the plant yields increases dramatically (and may only provide significant economic returns) if the plants are irrigated. So where will jatropha really be grown, and what will it displace? If the land is otherwise useful, are we just creating crop substitution, adding to the global food crisis, and failing to reduce carbon emissions?

How will the cultivation work on the ground? Many of the proposals involve investor-owned plantations. Again, how will this land be procured, how will the local community be integrated into the process, and what are the local environmental impacts of introducing a new species?

Lastly, where will the fuels end up? The global commodity market is amazingly efficient, and the highest prices for biodiesel today are in Europe, as are the refineries that process the extracted oil. With this in mind, I ask myself: Are we back to a model where poor countries export natural resources and occupy only a small part of the value chain with little local value added?

We’re still trying to understand these issues, and are having lots of conversations on what’s going on. We’d like nothing more than to find the entrepreneur that has begun to address these challenges into a plan for a viable business.

I attended the Harvard Social Enterprise Conference in Boston this past Sunday - very impressive. What struck me most was the diversity in the topics discussed and the participants. Topics included international development, microfinance, climate change, and social innovation, to name just a few of the panels. The variety - and quality - made it really hard to choose what to listen in on and even harder to decide where to participate (I was a panelist on the International Development & Venture Capital Panel). And of course, the energy level and excitement was very high, even for a Sunday afternoon!

The conference not only impressed me with its breadth and depth, but it also inspired me to think a little about Acumen Fund’s role at such events. Too often, it seems that Acumen Fund is pigeonholed into the “venture capital and development” panel, when we could also speak credibly about water, energy, housing, healthcare, “new philanthropy,” NGOs’ scaling issues, “base of the pyramid” strategy, and many more issues. Perhaps this is a good problem to have - expertise beyond a single niche - but I also hope that our conference participation will begin to reflect this growing knowledge base. Food for thought.

On my recent trip to India, I was struck by how in that country, almost nothing is wasted. Paper and packaging are minimized and always recycled. Food is purchased or made based on actual daily consumption. Garbage containers fill up much more slowly. (Unlike the two I drag to the curb of my home in New Jersey each week.) This is true at every level of Indian society – this consciousness is part of the culture. Given the current worldwide obsession with green, organic, and CO2, surely there is something that can be learned from this example.

I’ve just returned from almost three weeks in India, where I met potential investees for our energy portfolio. There is so much happening in India, and it really seems like we have a few good opportunities in front of us. 

One thing I found fascinating is the fact that almost everyone I met wanted to talk about the Reliance Power IPO and Tata Nano $1000 car, both of which hit the news while I was there. These two events have really captured the imagination of an entire subcontinent. People of every economic class were proud and felt like these were their own successes, even though for most Indians, the economic connection to both was quite distant. It was a reminder that the desire in all of us to find successes that we can relate to and share in is extremely powerful. It is a core tenet of Acumen Fund’s philosophy and a central part of our work in helping form new companies & institutions