Venture capitals in India, which traditionally invested in urban segments or technology sector, have begun investing in rural-centric technology firms. Avishkaar India Micro Venture Capital Fund, Acumen Fund, and Rural Innovations Network are showing increased focus on rural markets.

A non-profit investment firm E+Co, with investments in 28 countries, plans to begin operations in India. The firm with $183 million capital mobilised and $24.6 million investment portfolio will focus on clean technology.

"India has very few funds that look at investing in rural India. But what's heartening to see is that the sector now has a few options and entrepreneurs can approach for investment," said Arun Natarajan, MD and CEO, Venture Intelligence.

Most of these VCs get their funding from philanthrophic activities. RIN gets funding from donors such as HIVOS, The Lemelson Foundation, Sir Dorabji Tata Trust, and The Rockefeller foundation. Whereas Google, Gates, Cisco and others form the investor base for the Acumen Fund.

Acumen India has been in the country since 2005 and has invested in 12 entrepreneurs. The focus is to fund innovative businesses that target the poor as consumers and demonstrate to the world the sustainable ways of bringing access to critical goods and services such as healthcare, water, housing and energy to low-income households.

So far, Acumen India's total approved investment is $17.4 million.

"Our capital commitments range from $3,00,000 to $20,00,000 in equity or debt with a payback or exit in roughly five to seven years. Our average investment is about $1 million. We also do follow-on investments as our portfolio companies' scale - leading to anywhere up to $4-5 million exposure to a given company," said Clara Bardy, India Portfolio Associate, Acumen Fund.