India Inc.’s queer tryst: Is corporate India ready to embrace the $200-billion opportunity?

IT’S ALMOST NOON and The Trans Café, a quaint eatery in a bylane of Andheri, Mumbai, is getting ready to begin its lunch service. As restaurant manager Mahi stations herself at the entrance in a vibrant magenta sari to welcome her guests, she tells us it is popular among office-goers as it serves ghar ka khana [home-cooked food].

“Our bestseller is the thali for which we charge just ₹100. Earlier we used to only serve café food, but ever since we started serving regular Indian food our sales have spiralled,” says Mahi.

What is unique about The Trans Café? It is run by a team of six transgender women. Founded by the former diversity, equity and inclusion (DEI) head of Pernod Ricard, Zainab Patel [a trans woman herself], in 2022, The Trans Café is already a ₹86 lakh business. Apart from the 275 sq.ft. café in Andheri, Patel’s 25-member trans women team also operate the Axis Bank’s cafeteria at its Airoli campus in Mumbai as well as Godrej Industries’ Equality Café at the Godrej Reserve campus in Kandivali, Mumbai.

Among the most marginalised minority communities, transgenders have been ostracised by society. When Mahi welcomes customers into the store, she sends an important message out to her peers — there is hope, one can live a life of dignity. “The idea is to mainstream through food and enable job seekers become job creators. Trans people are struggling to find employment, and they will not be able to get into corporates. So, the easiest way is to ride the tide of entrepreneurship,” explains Patel. After hiring these women, she also puts them through an entrepreneurship development programme that enables them to give employment to others from the community. “Be it the café in Andheri or other initiatives (she also runs the Trans Salon, in Mumbai), they are owned by a trans entrepreneur, and the only expectation out of them is investment of time and commitment,” she adds.

It’s not just transgenders, but the Lesbian, Gay, Bisexual, Transgender, Queer, Intersex, and Asexual (LGBTQIA) community as a whole has been treated with disdain for centuries. Though India has decriminalised homosexuality (through the annulment of Article 377), it is yet to recognise same-sex marriage. As a result, the LGBTQIA community, also referred to as the queer or pride community, continues to face biases across society. Close to 10% of the Indian population comprises of trans, gay and lesbian people, but bulk of them don’t want to disclose their identity due to the fear of getting sidelined and ostracised by their families and the society.

This is evident from their lack of representation in the formal workforce. Though organisations are now open to hiring queer people, for most it is just a tick-in-the-box activity to show the world they believe in diversity. Integrating the queers into the workforce and charting a career path for them is still a far cry. While the U.S. has examples of Sam Altman of OpenAI or Tim Cook of Apple who have come out in the open as gay, India has the likes of Radhika Piramal, executive vice-chairperson, VIP Industries and Keshav Suri, executive director, The Lalit Suri Hospitality Group, who are proudly lesbian/gay. But the likes of Piramal and Suri are far and few.

Suri positions The Lalit Hotels to be a ‘proudly pride’ organisation. “I am an openly out executive director. At The Lalit we never shy away from LGBTQI inclusion. We have our pride flag flying 365 days at all our properties.”

In the world of entrepreneurship, pride founders face similar challenges as founders of women-led businesses — raising funds to scale up. Just as women-led enterprises complain about investors not giving them an ear unless they have a male co-founder, a gay, a lesbian or a trans founder prefers not to disclose his/her sexual identity, at least till the business reaches the stage of series A funding. “The start-up, private equity and IPO ecosystem is funded and run mostly by straight able-bodied men. That heteronormativity and lack of diversity is baked into the entire entrepreneurial and financial ecosystem. Any kind of diversity is not the norm, so many people hold back that part of themselves to succeed,” points out Parmesh Shahani, head, DEI Lab, Godrej Industries.

The pride economy, according to Shahani, is worth $5 trillion globally. In India, it is a $200-billion opportunity, largely underserved. However, there are a bunch of pride start-ups such as Patel’s The Trans Café & Trans Salon, Gaysi (a media platform for queers), Rainbow Bazaar (a pride ecommerce platform), Misfyt (a transgender hiring platform) and Adalat AI (a legal tech platform), which are proudly queer businesses. They are out in the market trying to achieve scale and take their businesses to the next level.

Profit or not for profit

The most talked about global LGBTQ business is U.S.-based, $28-billion dating platform, Grindr. The other popular used case is of car manufacturer Subaru, which started featuring gay couples in its ads way back in the eighties. The car manufacturer’s conversation with the queer community is known to have helped to keep its business stable when its peers witnessed sharp dips in growth each time there was an economic crisis. In fact, Subaru’s queer narrative got so ingrained that a gay or lesbian couple in the U.S. is invariably asked, ‘where’s your Subaru?’ Shahani of Godrej cites the example of how Todd Sears, former head of diversity, Merrill Lynch [currently founder and CEO, Out Leadership] actually got the company a revenue of $2 billion in the early 2000s by focusing on queer couples. “Todd Sears said queer couples, many of whom who don’t have kids, are a good target for the company. While ‘straight’ families may need to do succession planning and wealth management in a certain way, the way queer couples need to manage their money and structure their life is different. He made a small team that would target queers and said even if they were able to make $20-30 million it will be good enough. He brought in a revenue of $2 billion!”

Indian queer startups are in their infancy, grappling with basic issues like whether to register themselves as a for-profit or not-for-profit. A bulk of them prefer the latter. Sakshi Juneja, founder and director, Gaysi Family, launched her media platform for the queer community way back in 2008, but she registered Gaysi as a private limited company only in 2013. “The law was not on our side for the longest time and that made me wonder if it made sense to have a full potential private limited organisation. Moreover, for me there was no template as there is no business like ours in this country. I always wondered if I was emotionally there to do something like this,” says Juneja, who aspired to be the Yashraj equivalent in the queer content-making space. Largely ad-funded through digital-led content and events, Gaysi Family is one of the few for-profit Indian queer businesses.

Shaman Gupta, founder of transgender hiring and skilling platform, Misfyt, prefers to remain a non-profit firm (and raise funds from CSR budgets of corporates and grants) as he is not sure if the investor community would have the patience and willingness to invest in his cause. “We didn’t feel the start-up VC ecosystem would even see the potential as the numbers we are talking about aren’t large. Even if I place 100 people in a year or 5-10 people a month, it’s a huge thing. When it comes to helping transgenders find a job, it’s not just about skilling or placing them, it’s also making sure they are given housing, and taking care of their mental health. All this makes it extremely time consuming and it is very difficult to explain to the investor community.”

Similarly, Srini Ramaswamy and Ramakrishna Sinha founded Pride Circle as a social impact cause to uplift the lives of the LGBTQI community. Apart from getting corporates to hire from their job fairs and conducting skilling and sensitisation programmes, the duo has also launched Rainbow Bazaar, an ecommerce platform for pride entrepreneurs. Unlike Amazon or Flipkart which charge entrepreneurs a commission to list and sell their products, Rainbow Bazaar is a free platform. “Whatever money the entrepreneurs make by selling on our platform goes to them. We get our revenue by charging a commission from corporates who source from Rainbow Bazaar. We create value for companies, charge them for that and offer it back to the community,” explains Sinha, co-founder, Pride Circle. “Pride Circle has a not-for-profit, Section 8 entity where we get CSR funding. We do a combination of consulting, grants and donation for funds. Through advocacy we are able to help the community in terms of financial inclusion, employability or entrepreneurship,” adds Ramaswamy, co-founder, Pride Circle & Rainbow Bazaar, and chief evangelist.

The challenge for legal AI platform, Adalat AI, is different, though. Though co-founder Utkarsh Saxena proudly identifies himself as a gay entrepreneur, his business is not targeted at the queer community. “We fund ourselves through philanthropic grants, CSR funding and support from HNIs. We went non-profit because we are solving pain-points in the legal system and district courts can’t afford our services. Also, the context is sensitive. The courts may not want to give for-profit organisations access to confidential information,” says Saxena.

Investment challenge

Godrej’s Shahani, himself a proud queer individual, has also invested in pride startups. Each time he mentors a queer entrepreneur his first piece advice to them is to get basics such as insurance sorted out. For, given the apathy the community is often subject to, the business may not take off at all. He also doesn’t force the founder to come out in the open until they get to a certain level of funding that would ensure the ship is in safe waters. “If someone is willing to come out, I salute them and tell them it’s not going to be easy, but together, we are going to create a better world.”

When Fortune India reached out to the investor ecosystem, nine out of 10 told us gender identity is not even a criteria to evaluate a business. But the reality is that queer and even women-led businesses find it difficult to raise funds. According to a Pride Circle report on LGBTQ entrepreneurship in India (brought out in association with Northern Trust), 52% of queer businesses are bootstrapped, 29% get funding from friends and family, 12% rely on co-founders to pitch in, while only 7% manage to get bank loans. Over 70% of transgender entrepreneurs prefer a sole proprietorship model, which is mostly due to a straight man or woman not wanting to partner with a transgender. It is relatively easier for gay and lesbian entrepreneurs to have a partnership model.

Lalit Hotels’ Suri’s two cents for a queer employer is not to lose their identity trying to impress investors. “I tell them to be themselves. If they have a great idea, I tell them to incubate it, but make sure they are resilient. I tell them not to lose their individuality because that’s the essence of their business.” Suri firmly believes while it is important to listen to investors and be able to repackage it, success would depend on how one makes a fringe business mainstream. “If you are strong in your resolve every investor will accept it,” he adds.

Atul Satija, founder, The Nudge Institute, admits the investment community doesn’t understand queer needs. “The kind of problems queer entrepreneurs choose to solve are deeply lived experiences. They are able to take up harder, lived problems, and not just those that others perceive might exist. Since there aren’t many pride people in the funding community, their appreciation of the problem faced by queers is limited. Therefore, we coach them to run it like any other business, sell better and communicate better so that fund-raise becomes easier.”

In fact, Juneja of Gaysi Family has never gone to an investor and asked for funds. She is not sure if she would even do so in the near future. “Whoever we get on board, they need to understand us. More than the money, one needs to know if they are coming in with the right sensibilities.” Pride Circle founders agree. “We are looking at reaching out to investors this year, but they need to understand we are a social enterprise and can’t deliver 20x returns. Finding an investor with shared vision and values is important,” says Sinha.

Sandeep Murthy, partner and MD, Lightbox Ventures, admits bulk of the investor community doesn’t have an understanding of the pride businesses. “There has to be a concerted effort of knowing each other, it has to start there. From there we can see what the business looks like. The business has to stand on its own merits. I don’t know if it’s the right answer to fund on a different set of parameters, but I do think you need to expose every group to the same universe of information.”

Manvendra Singh Gohil, founder, Lakshya Trust, an NGO working in the space of gender equity and inclusion of the LGBTQ community, says pride entrepreneurs need to represent the LGBTQ community at large and other minority communities such as people with disabilities in their business rather than focusing just on transgenders or the lesbian/gay communities. “When you only think about yourself, you become too selfish in your approach. The moment your business represents marginalised communities, people start taking you more seriously.”

Privilege matters

Patel of Trans Café has a different view on the funding challenge. She says the only reason she chose to launch her business as not-for-profit was because she launched just right after the pandemic during the “funding winter”. “Had I started today, I would have launched as a for-profit entity and got registered in StartUp India and raised funds. I have banks who have offered me loans versus me asking them.”

Does privilege matter? After all, Patel was a well-known DEI specialist in corporate India. “If you talk about privilege as having a job and speaking in English, then yes, I have it. But I have also worked hard to get the model right. We have run the business for two years and paid back our loans, so that the rate at which they will get back their money is assured. Credibility also plays a big role. My model is sustainable and is working on its own.”

Saxena of Adalat AI admits his upper-class upbringing has helped. “I am an upper-class man, educated in some of the best schools. My queer identity is public, but I think it is my other identities which have worked more. If I was a woman or a trans person or if I didn’t speak English, it could have been a different story.”

But the world is getting better for queers. While hiring for his venture, Saxena of Adalat AI tells people he is queer. Most have said his sexual orientation hardly mattered. “Being homophobic is no longer a symbol of being macho and that shows India is evolving.” To add to this, the government has laws in place which support the LGBTQ community.

There is definitely light at the end of the tunnel.