C3 recently sat down with Priya Krishnamoorthy, founder and CEO of 200 Million Artisans, to talk about how catalytic capital is helping grow the handmade sector in India. She notes that lessons learned in India represent a model for organizations and initiatives in other countries with a large craft sector –Kula Conclave | Kula Innovate | Business of Handmade
C3: First, can you describe the sector? What is considered a “craft” or “handmade” business?
PK: The artisan economy remains a larger subset of global creative and cultural industries. Unofficial figures estimate, in India, over 200 million livelihoods are linked to the ecosystem, and it operates across the farm-to-consumer value chain–which also means “craft” or “handmade” is more than just a smattering of a few products. It is an entire sector supporting multiple and diverse supply chains that we now call Creative Manufacturing and Handmade (CMH), which is set to become a $1 trillion market by 2030 in India alone. It offers dignified livelihoods and acts as a bridge between formal and informal economies and is well-positioned to address challenges of job creation, climate change, and gender equality.
This creativity and culture-led manufacturing revolution is driven by 300,000+ craft-led micro, small, and medium sized enterprises (MSMEs). Such MSMEs include brands, social businesses and startups that employ artisans / creative producers and deliver products, services, and experiences across fashion, home-decor and lifestyle, e-commerce and retail, travel and experiences, visual and performing arts, craft-tech, culture-tech and more.
Unlike traditional factory-led centralized models, enterprises in the CMH ecosystem, often employ decentralized, often non-automated modes of production rooted in creativity, cultural skills and craftsmanship. At one end, such enterprises are creating approaches that preserve traditions, knowledge systems, processes and techniques, and bringing these into contemporary conversations. They are also driving innovations from creation of new materials and better technology to the development of business models that enhance artisan lives and consumer experiences.
According to our research, Business of Handmade – 2nd Edition which was supported by C3 Grantmaking, most of the market is dominated by three unique segments: digital upstarts, including new-age enterprises that build online brands; grassroots-to-markets nurturers, which are nonprofits or social enterprises working with artisan clusters in rural India; and lifestyle curators, focusing more on luxury brands. And in recent years, we are seeing the emergence of innovation-led enterprise segments like input-innovators creating new, sustainable input materials using upcycling + recycling methods and process enhancers, tech-based disruptors looking to modernize a traditional system.
Our research also found that 78 percent of craft-led businesses in India struggle to access working capital. Just one in 10 said they have easy access to financing, with 88 percent being forced to self-fund, limiting their scope, growth and innovation. Not surprisingly, 92 percent said catalytic capital would be a good fit for their needs.
Such enterprises are also ambitious and hungry for growth, often created or driven by a much younger cohort of founders. These enterprises are serious about balancing profit and purpose – 89 percent are serious about building brand, growth and profitability; 70 percent support a workforce with an equal or higher female skew; and 72 percent make artisan well being a primary focus.
Ultimately, what defines a craft or handmade business in India is not just the end product, but the story, skill, and ecosystem behind it. Whether a weaver or a tech-enabled natural dye innovator, they all form part of a creative economy that reflects both tradition and innovation.
C3: Your research was really the first of its kind to help investors understand the opportunities in the sector and to hear directly from entrepreneurs. What’s happened since you released it?
PK: Since its 2023 release, the 2nd edition of Business of Handmade has been widely referenced by investors, policymakers, and sector leaders, even making its way into classrooms and boardrooms — fueling momentum for India’s handmade sector. In the last year alone, we are most certainly seeing a lot more activity. Handmade, and more broadly Creative Manufacturing and Handmade, is slowly but steadily becoming a sector that cannot be ignored. Further, with creative and cultural industries now being positioned as a standalone area of investment worldwide, policy is aligning to investment.
Mainstream capital providers are coming in because the sector is seen as aspirational. There are so many next-generation brands bringing energy to the sector, and that means craft-led businesses are on the radar of mainstream funders. In the last two months alone, we have seen the emergence of two startup accelerators exclusively designed to support craft-led businesses in India. We see this as a big win for the ecosystem.
We are building bridges with the investor communities while also ensuring that enterprises are mindfully supported.
Here’s one of the most important things: investors and funders aren’t just interested in “saving” the artisans, as has historically been the case. They are seeing a clear opportunity. Therefore, they are backing ideas that are not only making a business case for investment but also are opening new markets linked to responsible production and consumption. What’s even more interesting is that we are seeing the emergence of national and local capital portfolios where investors and funders are backing community-native, hyper-local enterprises that are leveraging India’s unique cultural capital to build products and processes that can go global. Investors are also betting on personalization that consumers world-over are demanding. Craft-led brands are well placed to help consumers move away from standardized “available to all” products to building their unique, personal identity anchored in their regional cultures.
In other words, the craft-led entrepreneurs and products are being supported for their own value. Plus, many such businesses are driving innovation that matters for the future of the UN Sustainable Development Goals (SDGs), especially SDG-12–Responsible Consumption and Production – and carry the potential to be scaled across countries and geographies. The Creative Manufacturing and Handmade ecosystem is a climate-positive sector. Livelihoods and gender inclusion are interlinked and a natural by-product across business models we have mapped.
C3: How does catalytic capital fit in with this growing interest?
PK: We are seeing catalytic capital take shape in this sector in India in more ways than one. There is growing interest among the impact investor community in the Creative Manufacturing and Handmade sector. Such investors are looking at the impact on livelihoods and jobs. They are looking at the fact that the sector is at least 50 percent women-led. They understand that the sector is helping solve critical climate challenges. For a lot of impact investors, the handmade sector checks a lot of boxes. For more mainstream investors, they are seeing emerging successes that are delivering the numbers.
It brings us back to the business case for investing. The sector needs patient, flexible capital, and we are seeing people who are willing to jump in with that. At the Kula Conclave, we saw a lot of first-time investors, and they were open to listening. They want to learn. They are also open to taking a long-term bet on the sector.
Incubators are building custom investment theses to support entrepreneurs, and often such approaches are catalytic in nature. They are responding to the needs of entrepreneurs, who often do not want to take traditional equity or venture capital (VC) if it doesn’t meet them where they are. This is not to say VCs are not investing. In the last five years alone, we have seen many investments go through. However, this sector is at the nascent stages of evolution and requires its own playbook for investing. Mainstream VCs generally don’t understand the sector. It isn’t like investing in tech. As such, the sector is also offering investment actors the opportunity to rewrite the investment playbook.
The Indian government is also playing an increased role and as a result, lenders have been willing to test collateral-free loans in the sector. While the interest rates are on the higher side, we see this as a new opportunity for many craft-led businesses that simply don’t have the collateral that mainstream financing often requires. Initiatives like the Open Credit Enablement Network (OCEN) are also paving the way to democratize access to formal credit among MSMEs in India.
Lenders are also testing revenue-based financing plans. In one use-case, the lender was able to provide working capital loans at 7 percent interest — which is unusual in India. They could do it because the government subsidized underlying capital costs via a blended approach. The demand for access to working capital under 10-12 percent is growing louder among many craft-led enterprises. This is, once again, great news because two years ago 88 percent were still self-financing their operations. Now we know, craft-led businesses are open and ready to engage with the capital ecosystem.
C3: You mentioned the Kula Conclave. Can you talk more about how it fits into your broader efforts to build a strong ecosystem of investing for the sector?
PK: Kula is an invite-only, networking event that connects high-potential, capital ready creative, cultural and craft-led entrepreneurs to capital providers, policymakers and other ecosystem actors with the goal to build a supportive ecosystem for the handmade sector. It is also a hotbed of thinkers who are driving innovation to bridge the inclusive capital gap.
Here is one example: we hosted the Kula Innovate Challenge in the months leading up to Kula Conclave to close the innovation capital gap for enterprises. While we had some cash prizes that would normally be awarded in this kind of event, many partners of Kula Innovate offered unique capital approaches. We had an innovation partner that offered patient debt to the enterprises with the most promising strategies. We also had a funder offering gap financing along with in-kind support for clean energy solutions. As such, Kula Innovate is also becoming a testing ground for new capital approaches and we are excited by what’s to come. We also had partners willing to offer social procurement partnerships which would be a game-changer in a retail-led sector.
For a sector as fragmented and undercapitalized as the handmade economy, there’s a real need for spaces that enable cross-sector collaboration—that’s exactly what we set out to create with Kula Conclave.
Funders and investors show up at Kula to learn about and support new ideas. It’s like a community of practice, and 200 Million Artisans acts as a bridge connecting diverse communities with the goal to build a business case for investment in the sector overall. We are building bridges with the investor communities while also ensuring that enterprises are mindfully supported.
For a sector as fragmented and undercapitalized as the handmade economy, there’s a real need for spaces that enable cross-sector collaboration – that’s exactly what we set out to create with Kula Conclave.
C3: What are you hearing from new investors? What barriers do they face in providing capital in the craft sector, and how are they solving for those barriers?
PK: There is a new generation of funders and investors being drawn in—like high-net-worth individuals under 40. This is great news for the sector because it opens up new opportunities to build the catalytic capital ecosystem. These first-time funders need access to the right information as well as education to invest in the sector. They are willing to participate with both debt and equity, as well as alternative approaches but they need to know: What do terms look like? What does the return on investment (ROI) look like? What does success look like? What does long-term impact look like? They also need access to robust enterprise and innovator pipelines spanning diverse interest areas–climate action, dignified livelihoods, gender-inclusion, design and cultural preservation, emerging technologies, conscious design, future-ready retail, and more.
Investors and funders also need access to data-driven, story-led approaches around new capital innovations, exits, and market trends, as well as the market size and market segments. This sector can no longer be clubbed under the broader umbrella covering multiple impact investing sectors. The rules of engagement in creative and cultural industries are unique. and they are particularly different when we factor in Global South realities. For example, In India, we have 22 officially recognized languages. Therefore, startup-centric capital models that favor pitch deck-led approaches anchored in English often exclude regionally and linguistically diverse small enterprises.
Traditional startup support approaches also don’t take into account the distributed, community-driven models emerging in craft-based economies where exit is not often the end goal for many enterprises.. Thus, for this sector to become a viable investment opportunity in the long-run, we need infrastructure that aids the creation of fit-for-purpose methods to track impact metrics as well as capital-readiness. The “one size fits all” approach is doomed to failure.
While “craft” might seem too small as an investment opportunity to most, if we start seeing this as Creative Manufacturing and Handmade sector that spans products, processes, systems, and experiences, we are talking about creativity and culture-led manufacturing as well as global-local value chains that present an opportunity to shape the future of how we create and consume, and how we invest.
This sector also brings additionality and makes it possible for other sectors–technology, healthcare, education–to jump in and drive impact-led solutions for a largely informal economy, not just in India but across the Global South. That is also why intermediaries like 200 Million Artisans and many others are critical now more than ever. The challenge, however, remains that in the era of deep-tech and artificial intelligence, support for innovation remains limited for craft-based and creativity-led economies, thereby leading to limited investment in future-ready institutions and infrastructure.
C3: What about entrepreneurs? How are they changing the conversation about local needs and local investing?
PK: What is exciting about the Creative Manufacturing and Handmade ecosystem right now is it is offering solutions for every kind of impact investment priority.
For instance, craft-led enterprises are embedding waste-to-value innovations into their business models, building climate-smart supply chains, and innovating on nature-based solutions. For example, Golden Feathers, which recently won the Artha Impact Award at Kula Conclave, is pioneering change in the textiles and paper industry with its innovation of 6th natural woolen fiber of the world, crafted from upcycled butchery chicken waste. The efforts are deeply rooted in creating opportunities for marginalized communities, especially tribal women. Another enterprise, Resham Sutra, is revolutionizing silk production with solar-powered machines, boosting productivity while empowering rural women and farmers through sustainable, energy-efficient livelihoods.
Craft enterprises are localizing materials, strengthening artisan networks, and reducing dependency on imports. For example, Kadam Haat integrates locally sourced fibers like sabai grass and sitalpati, supporting 900+ women artisans with consistent livelihoods. Desi Oon revives indigenous wool economies, replacing imported and synthetic wool by strengthening local shepherding communities.
They are also building inclusive business models. P-Tal, an emerging startup, treats artisans as partners, integrating employee stock ownership plans (ESOPs) and equitable profit-sharing. This has increased artisan incomes from ₹2,000 (~$23) to ₹57,000 (~$670) per month, with some earning up to ₹2 lakh (~$2350) — supporting financial security, agency, and long-term sustainability. Craftizen Foundation is pioneering inclusive skilling by designing craft-based education for people with disabilities.
This sector also brings additionality and makes it possible for other sectors – technology, healthcare, education – to jump in and drive impact-led solutions for a largely informal economy, not just in India but across the Global Majority.
We are also seeing the emergence of craft-tech. Blockchain-backed authentication, QR-coded product journeys, and open-source platforms in textile and craft value chains are beginning to enhance visibility into material origins, artisan wages, and production ethics.
While AI-driven approaches are important especially for data aggregation, the sector, given its high incidence of informality, needs investment in delivering access to community-driven technologies. For example, SASHA’s ergonomic workstations improve productivity without automation-driven displacement. SELCO Foundation is also investing in energy access solutions. Many hard-to-reach places in India still lack access to reliable electricity. Even access to mobile phones is not always a given.
India is just the tipping point with young founders building future-ready solutions. All these innovations are emerging despite very little access to innovation capital or the right resources. Imagine what could happen if we designed custom pathways to support creative, cultural, and craft-led brands, social businesses and startups.
C3: What lessons should others take from your experience?
PK: Any country that comes with a few thousand years of cultural history and heritage is likely to have a strong ecosystem of crafts. If we have to build an inclusive capital ecosystem then countries in the Global Majority–especially those in South Asia, Southeast Asia, Africa, and Latin America–should be prioritized for future strategies of catalytic capital deployment. We need urgent investment in infrastructure that can aid a networked and supportive ecosystem for the creative and cultural industries. What’s happening in India may be a template for the Creative Manufacturing and Handmade sectors anywhere in the Global Majority and beyond. This is only the beginning.
200 Million Artisans was created as an ecosystem enabler to bridge gaps in data and insights, collaborative networks and inclusive capital. With every platform we launched, we have been overwhelmed by the response from the community, both enterprises and investors. Clearly, there is a need that isn’t being met. If it is happening in India, chances are the need exists across the world. The markets are interested and so are consumers. The time is now to unlock the right capital, the right resources, and the right networks for building a future-forward entrepreneurial and innovation ecosystem.
While 200 Million Artisans is a homegrown enterprise, we see the value of expanding and scaling our reach beyond India, starting with South Asia. We are also building collaborations with communities and enterprises in Latin America and Africa to build a collaborative network. A woman artisan working in the mountains of India and one working in the Andes are facing some of the same challenges, as are the enterprises who work with such artisan communities and creative producers.
The same is true of catalytic capital in the handmade sector. It can help open up the market to people not currently engaging with the capital ecosystem. It can help drive sustainable growth and strong value chains. It is an important part of our work to bridge local craftsmanship and global markets and to amplify the visibility, value, and impact of handmade in India.