Over the next five years, 500 million first-time internet users are expected to come online via their mobile phones in India. This online mobile population is often called the “Next Half Billion” (NHB). At Omidyar Network, we recently announced six new investments — Doubtnut, Pratilipi, Healofy, Vedantu, Kaleidofin, and Affordplan — all of which align with our goal of supporting entrepreneurs that serve the Next Half Billion.
We are looking to support early-stage businesses with the potential of creating access to jobs, education, health care, transportation, financial services, and government services for the NHB. Our recently published study on the NHB highlighted the impediments this population faces and how their needs differ from the existing middle class.
What are the barriers that the NHB encounter? English language content currently dominates the internet — hence, increasing the content in a variety of India’s local languages is key for internet adoption by the NHB. The social and communications apps space is currently dominated by US-based platforms, and there is room for local innovation here too.
Social and cultural barriers are also hindering use of online services; for example, this population has not been exposed to the self-service shopping experience, so icons like shopping carts and language like “proceed to checkout” can be foreign and intimidating. Additionally, many in this population perceive the internet as a “bad influence” — for example, something that will damage marriages, leading to limited or restricted online access for women, a key consumer demographic in the NHB. This is a frugal population that will require highly affordable data services and innovative approaches to building businesses that can both earn their trust and address their needs in a cost-effective way.
Despite accelerated smartphone adoption by the NHB, many believe that transacting online is a complex process that requires special skills. Very few users conduct financial and commercial transactions on their mobile devices because they lack the confidence to transact online.
In the context of these language, social, cultural, affordability, trust, and confidence barriers that the NHB encounter, our new investments highlight six companies that are addressing the impediments in a variety of ways.
Doubtnut, Pratilipi, and Healofy address the language barrier. Doubtnut is an online learning platform where students can, within seconds, find the answer to a question by simply clicking the image of the question on Doubtnut’s Android app and viewing the corresponding video solution from Doubtnut’s library. Healofy is a social platform with content for new and expecting parents. Pratilipi is a self-publishing platform with more than 190,000 content pieces published by more than 29,000 authors. All these are multilingual platforms, and Healofy and Pratilipi support as many as eight Indian languages.
Healofy’s and Pratilipi’s users are predominantly women, and the platforms help this massively under-represented segment overcome the perception of the internet as a “bad influence” and help this key consumer demographic deeply engage and build comfort with the digital medium.
Vedantu, an online live tutoring platform, allows prospective users to experience a live classroom session before the purchase decision, to build confidence. It also assures refunds to students who are not happy with the offering. They have reached over 10,000 students across 400+ cities in India and abroad.
Kaleidofin and Affordplan have created platforms that can relate to the social and cultural context of their customers. Affordplan is a FinTech startup in the healthcare space and its solution helps patients plan, save, and pay for upcoming medical procedures such as dental, fertility, maternity, orthopedics, and eye care needs. A sales team and primarily female field agents, drawn from the communities they serve, help the company connect better with their customers and assist them in using technology, including online payments.
Kaleidofin is a FinTech platform that helps under-banked customers, mainly in the informal sector, meet their real-life goals by providing intuitive and tailored financial solutions such as liquidity loans, savings, and investments in mutual funds. Data collection for the Kaleidofin app is done by community workers who understand the customer context and are therefore able to ensure quality and that meaningful data is collected, which helps the company create robust algorithms.
These six companies are using connectivity to expand the market to underserved customers. More than 90 percent of Doubtnut’s users come from Tier 2 cities and beyond — places such as Kohima, Poonch, Islampur, Bankura, and Julurpad — hitherto unreached by online and offline solutions. Affordplan’s consumers have a monthly family income of Rs. 10,000 — Rs 40,000, while Kaleidofin serves customers with a monthly family income of Rs. 15,000 — Rs. 30,000.
The entrepreneurs leading these six remarkable companies are enabling first-time access to a range of basic products and services in an affordable manner and directly addressing the unique barriers that the NHB face in their digital journey. They are expanding the market to traditionally underserved and excluded populations, thus creating opportunities to improve the lives of millions of Indians.
Read Omidyar Network’s report Innovating for the Next Half Billion