Guwahati: Entrepreneurs in the Northeast face significant challenges, including a lack of access to venture capital, cultural misalignments with traditional business models, and insufficient support from existing incubators and accelerators. There is a systemic bias in the broader investment landscape, where the Northeast is often overlooked, leaving local businesses underserved. Alsisar Impact, a leading investment firm led by Anuj Sharma, promotes indigenous entrepreneurship by prioritizing local communities in Assam, Nagaland, and other northeastern states, aiming to bridge the funding gap and challenge systemic biases that hinder their growth.
In an exclusive interview with Business North East (BNE), Anuj Sharma, the founder of Alsisar Impact, shares his deep insights into the evolving startup ecosystem in Northeast India.
Here are the excerpts from the Q&A interview:
1. BNE: As an entrepreneur and asset allocator, you must have experienced the critical need for investments, mentorship, and guidance. Having been active in the Northeast for years, can you shed light on the state of startups and entrepreneurs here, especially regarding investments?
Anuj Sharma: I have been working in the Northeast for almost 12 years, and it has been an enriching experience. The people here are incredible, the ecosystem is vibrant, and the region’s biodiversity is unmatched. However, when it comes to investments, there is a glaring disparity in the Northeast.
The Northeast has often been overlooked by venture capital and private equity. This bias, whether intentional or systemic, has left the region underserved. At Alsisar Impact, we address this by promoting a concept we call conscious bias, prioritizing support for local and indigenous entrepreneurs. For example, we focus on Assamese entrepreneurs in Assam and Naga entrepreneurs in Nagaland. This localized approach ensures that investments create a meaningful impact within these communities.
The larger investment ecosystem in India often concentrates wealth within some communities, with around 90 per cent of fund managers and 93 per cent of funded founders coming from similar backgrounds. This lack of democratization creates barriers for diverse entrepreneurs, particularly women and underrepresented communities, drastically reducing their chances of securing funding.
2. BNE: That is a unique and impactful perspective. What are the main bottlenecks observed in supporting startups in the Northeast?
Anuj Sharma: Several challenges stand out. While numerous incubators, accelerators, and funding initiatives exist in the Northeast, a significant portion of the funds is diverted towards program management rather than directly supporting entrepreneurs. This limits the opportunities for local startups to grow and scale.
Another issue is the low tolerance for failure. In startup ecosystems worldwide, failure is often viewed as part of the learning curve. However, in the Northeast, biases against local entrepreneurs amplify the fear of failure, making it harder for them to take risks.
Moreover, the cultural values of Northeast entrepreneurs—rooted in empathy and community growth—do not always align with the venture capital model, which often emphasizes a 'winner-takes-all' mindset. This cultural mismatch, coupled with the need for patient capital, makes it imperative for investors to immerse themselves in the region’s unique ecosystem to understand its potential.
3. BNE: You mentioned the lack of local role models. How does this impact the ecosystem?
Anuj Sharma: The scarcity of local role models is a significant barrier. While large startup events often bring in national and global figures, they fail to highlight local success stories. This lack of visibility makes it harder for aspiring entrepreneurs to envision their potential.
For instance, while a Flipkart founder may inspire at a macro level, the Northeast’s unique cultural and economic context calls for relatable role models who understand the region’s challenges and opportunities. Without these, it is difficult to inspire the next generation of entrepreneurs.
4. BNE: Government schemes and funding opportunities exist, but where are we falling short in leveraging them effectively?
Anuj Sharma: The inefficiency lies in the lack of accountability and the perception that the Northeast is merely a consumption economy. This misconception ignores the Northeastern region's immense contributions, such as its biodiversity, fertile lands, and indigenous forests vital to India's ecological balance.
Rather than treating the Northeast as dependent on grants, we should recognize its potential as a value creator. For example, while the region produces high-quality raw materials, these are often purchased at minimal prices, processed elsewhere, and sold at significantly higher prices, leaving local producers with negligible benefits.
Additionally, many initiatives focus on short-term outputs rather than long-term outcomes. For instance, training programs for micro-entrepreneurs often leave participants unsupported after the initial phase. This creates a cycle of dependency rather than fostering self-sufficiency.
5. BNE: What is the broader vision for addressing these gaps?
Anuj Sharma: To truly unlock the potential of the Northeast, we need localized leadership, patient capital, and tailored solutions. Investors must live and engage with the region to understand its strengths and challenges.
Moreover, the narrative around the Northeast must shift. It is not just a picturesque region with clear skies or fresh air but an economic hub brimming with untapped potential. We must move beyond tokenism and create an ecosystem where local entrepreneurs thrive, natural resources are valued, and the community is at the centre of development.
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6. BNE: Earlier, you mentioned the potential for local producers to become a trading hub. Could you elaborate on how we could position ourselves as a trading hub like other Southeast Asian countries?
Anuj Sharma: Take Meghalaya as an example. We have world-renowned Lakadong turmeric. Why are we still selling it as raw turmeric here in the region? For instance, you can buy it for about ₹50 per kilogram in Meghalaya. But if you go to Mumbai, the price skyrockets to over ₹1,000. Internationally, it could be priced at over $100 per kilogram. There is massive potential for value addition. We can create a brand around Lakadong turmeric, driven by local people.
The problem is that producers often aren't encouraged to build brands or think globally. People claim there are issues with packaging, business models, or presentation. These are easy to solve. I can hire the right people for that. However, the main problem is the lack of intentionality from enablers. Despite numerous enablers, the ecosystem has not evolved to the next level. It is often assumed that local people should remain small, but that mindset is detrimental. Our children should be taught to aim high right from school - not just college.
7. BNE: So, when do you think the Northeast can reach the same level of startup ecosystem growth as other states in India? How can it become a hub for all types of business?
Anuj Sharma: The vision should not just be about modest growth. We should aim for a tenfold, twentyfold increase. The current economy of the Northeast should not be limited to ₹100 billion, but we should set our sights on ₹1 trillion in the next 5 years. With everything going for us—the best natural resources, abundant water resources, unparalleled biodiversity, and a community-driven workforce—we have all the ingredients for success. What we need now is direction and belief in ourselves. Once we have that, we will achieve it.
