How Impact Investments Can Transform A Social Good Startup

An infusion of cash from like-minded investors can transform a good idea into powerful change.

How Impact Investments Can Transform A Social Good Startup
[Image: Abstract via Shutterstock]
Adapted from The Power of Impact Investing: Putting Markets to Work for Profit and Global Good, by Judith Rodin and Margot Brandenburg, copyright The Rockefeller Foundation, 2014. Courtesy of Wharton Digital Press/

For friends Shaffi Mather and Ravi Krishna, two alarming encounters with health care systems in two different parts of the world would radically alter their career paths. For Mather, it happened one evening in Kerala, India, when he found his mother choking in her sleep. He had no idea whom to call for help. His mother survived, after an intensive care unit admission, but the experience left a lasting impression. A few days later, Krishna’s mother collapsed in Manhattan and was retrieved by an ambulance within four minutes. The difference, they realized, was 911, the U.S. telephone number that provides quick, easy access to emergency services. They also realized that if an educated Indian citizen in urban Kerala did not know what to do in an emergency, how could poor, uneducated Indians cope with one?


Mather’s experience was not an isolated case. With no number to call, anyone with a medical emergency–particularly those in low-income communities–was better off calling a friend with a car or even a local rickshaw driver than an ambulance if they hoped to reach the hospital in time for life-saving care. The few ambulances in operation were often empty trucks, the same vehicles used as hearses, and there was no single phone number to call for help. As a result, people were dying needlessly.

In 2004, a group of five friends–Sweta Mangal, Naresh Jain, Manish Sacheti, Shaffi Mather, and Ravi Krishna–launched an emergency medical service in Mumbai with two ambulances. In 2005 they added 10 more ambulances. They named the service after the phone number that would connect people to it: Dial 1298 for Ambulance.

A New Business Model

Forming a company, Ziqitza Health Care Limited, they created a business model that would use cross-subsidization to cover the cost of operations while serving poor communities. The model is simple: Those who call and ask to be taken to private hospitals pay the fee; those going to government hospitals pay little or nothing. Advertising on the sides of the vehicles generates additional revenue.

The model worked, and the company became cash flow positive in the first year of operation. By 2009, Ziqitza had experienced two years of cash positive results, demonstrating both its financial viability and its ability to address a social need.

Philanthropic contributions and start-up funds certainly helped get the business up and running. New York Presbyterian Hospital and the London Ambulance Service gave the team pro bono technical assistance and management training. In 2007, Acumen Fund, a venture fund that uses philanthropic financing to invest in entrepreneurs with new ideas for tackling world poverty, took a $1.5 million equity stake in the enterprise to fund its expansion.


Since then, the company has attracted commercial investors such as Envision Healthcare (formerly known as EMSC), one of the world’s largest ambulance providers. It has also secured government contracts, and it counts leading Indian hospitals and corporations among its clients. Because it has successfully harnessed private capital, the company has been able to expand. As of December 2013, ZHL had a turnover of $20 million, and its service now operates in the states of Kerala, Punjab, Bihar, Odisha, and Maharashtra, with plans to start operating in more states across India.

Dial 1298 for Ambulance is a great example of how a company can move along a capital curve, from concessionary investment (in this case, from Acumen Fund) and in-kind donations (the London Ambulance Service and New York–Presbyterian, a leading U.S. health care institution) to more commercial capital (Envision Healthcare).

There was a time when the only option for financing this kind of positive social change was through philanthropy. In the case of emergency medical services, a nonprofit organization that used its charitable donations to deliver health care services to poor communities might have seen the return in the form of fewer needless deaths among patients with medical emergencies.
Today, however, impact investing also allows investors of all types to put money into companies such as Dial 1298 for Ambulance, for the goal of generating a financial return while also addressing a social need.

While this approach helps investors meet the dual goals of social and financial impact, it also takes its impact even further. In the case of Dial 1298 for Ambulance, this means saving more lives: by 2008, the ambulance service had saved the lives of more than 4,000 Mumbai residents. ZHL now operates more than 800 ambulances, has served more than 2.4 million people, and has delivered more than 6,500 babies on board.

By making an investment rather than a donation, you could pave the way for companies such as Dial 1298 for Ambulance to seek commercial capital, whether by securing loans or attracting other investors to take equity stakes. By helping these companies tap into the wider world of private investment funds, you could play a role in enabling innovative solutions to be scaled up and achieve even greater impact.

Adapted from [url=[/url], by Judith Rodin and Margot Brandenburg, copyright The Rockefeller Foundation, 2014. Courtesy of Wharton Digital Press

About the author

Judith Rodin is president of the Rockefeller Foundation, one of the world’s leading philanthropic organizations. Since joining the Foundation in 2005, Dr.