Where India’s Startup Capital Goes, and Where Its Craft Economy Doesn’t

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The Culture Track at Sankalp Bharat asked what it takes to build cultural brands outside the cities investors already know, and why should conversation land in Tier 2 cities like Lucknow

By Punita Maheshwari
 
Bengaluru, Delhi NCR, and Mumbai together raised roughly $8.7 billion of the $11 billion India’s startups pulled in during 2025, about 79% of the national total, according to Inc42’s Annual Indian Startup Trends Report. That figure covers Indian startup funding broadly, not craft or cultural brands specifically, but the pattern it points to matters here regardless: capital, and the brand-building talent that follows it, stays concentrated in three cities that sit far from where most of India’s craft and heritage economy operates.
 
That imbalance sat behind the entire Culture Track at Sankalp Bharat, held in Lucknow. The city’s chikankari embroidery tradition dates back roughly 400 years to the Mughal and Nawabi courts, carries a GI tag since 2008, and still supports more than 5,000 artisan families concentrated in the old city’s Chowk neighbourhood, alongside zardozi and other GI-tagged textile crafts from the wider region. None of that activity sits anywhere near the capital or brand-building talent concentrated three cities away.
 
Culture carries through to this year’s edition too. Sankalp Bharat 2026’s theme, Bharat Story, is built around three pillars, Climate, Culture, and Compute, homegrown, hard-coded, with Culture & Craft Economies running as one of four dedicated tracks through the summit in Lucknow this October. Before getting into what that track has planned for 2026, it’s worth revisiting what came out of the last one: a keynote from Sanjay, a panel with Chandu Nair and Varun Verma, and a walkthrough from Sheela Lunkad of DirectCreate.

₹1.2 lakh chappals and the cost of not owning a name

Sanjay opened by breaking the topic into four questions: what is scalable, what is cultural, what is a brand, and what is Bharat. His argument, stated plainly, was that India keeps supplying the skill behind cultural products without owning the brand that eventually sells them. 
 
He built the case on category after category. A pair of Kolhapuri chappals, made in Kolhapur, sells for a fraction of its price under its own name, the same design sells for ₹1.2 lakh once Prada puts its name on it. Embroidery commissioned in India for $500 ends up on a gown that retails for $30,000-40,000 once a global fashion house adds its label. Shahnaz Husain built one of India’s earliest personal-care brands by, in Sanjay’s words, marketing “5,000 years of heritage in a jar.” Yoga is an $80 billion global industry, and India holds almost no commercial share of it. Feni, a heritage liquor from Goa, is legally classified as a local brew and barred from sale outside the state, the position Scotch whisky was in during the 1850s before Scottish producers built it into a global category.
 
Sanjay traced the reason to a policy default: government programmes fund preservation, museums, and documentation, but rarely entrepreneurship. “We have to start thinking about promotion and creating prosperity,” he said, framing the rest of the session. He called for a whole-of-government, whole-of-nation approach, arguing no single organisation or scheme can close the gap alone, and pointed to a 2020 Google Trends report that found “Proud to be Desi” as a dominant search trend across every demographic in India, evidence, in his view, that consumer sentiment has already shifted ahead of the entrepreneurship needed to meet it.

What it actually takes to fund a craft brand

The panel that followed took the same argument from the investor’s side, and neither panelist softened the harder parts of it.
 
Chandu Nair, an angel investor, named a resistance he sees often: a lingering discomfort in India with profiting from artisans’ work, treated for decades as a choice between doing good and doing business. He argued the two aren’t in conflict, and used his own portfolio to make the point. He invested in a cast-iron cookware company when it was doing about ₹1 crore in revenue. Six years later, selling entirely online, it had crossed ₹180 crore. The core buyer wasn’t the grandmother generation the product was built for, it was women aged 22-35, and the brand’s positioning shifted to match, with Mandira Bedi and later Shriya Saran as brand ambassadors representing a fit, modern identity rather than a heritage one.
 
Nair argued capital isn’t the binding constraint, talent is. Brand-building skill in India is concentrated in Bangalore and Mumbai, built up over years at companies like Godrej and Marico, and it doesn’t relocate to Lucknow or Varanasi. Even if the funding gap closed tomorrow, he said, a founder in a smaller city would still struggle to find someone who knows how to build a brand.
 
He also argued the standard venture model itself is the wrong fit for this sector, and pointed to alternatives: revenue-share structures, deals where a founder returns an agreed IRR and keeps the business, and a comparison to football club ownership, contrasting the English Premier League’s single-owner model with the Bundesliga’s fan-owned structure, as a way to think about what patient, community-backed capital could look like for Indian craft brands.
 
He also raised a story he believes doesn’t get told the way it should: a 23-year-old founder in Hyderabad built a men’s grooming brand, Regional Man, from scratch to roughly ₹70 crore in revenue, then sold it to Mamaearth for about ₹195 crore. He contrasted the lack of attention that story gets with the coverage a handful of controversial businessmen receive, and named the filter he actually applies as an investor: not whether a business is good, but whether it’s investable, meaning there’s a realistic path to an exit.
 
Varun Verma, a partner at Fireside Ventures, pushed back gently on the pessimism, pointing to Indie Wild’s traction in the US and Anita Dongre and Sabyasachi’s presence in Western retail as proof that Indian brands can compete abroad. Fireside was one of only two funds in India investing in consumer brands when it started in 2017, built on the thesis that non-tech Indian brands could still deliver venture-style returns. But Verma was direct about where that thesis breaks down outside major cities: “I have visited 13 non-metro cities. I haven’t found a single founder I could invest in.” He attributed this to a business-building mindset that hasn’t yet taken hold outside the metros, not a shortage of good ideas, and argued that ecosystems grow from one visible success, the way Ola’s rise pulled a generation of Bangalore and Mumbai investors and talent in behind it. Until a comparable success exists for a cultural brand, he said, capital and talent won’t follow at scale. He also named storytelling as an underrated founder skill, pointing out that founders are constantly selling, to investors, customers, employees, even their own families, and that Indian founders in particular tend to undersell what they’ve built.

Eight thousand artisans, one platform

The session’s final speaker moved from argument to evidence. Sheela Lunkad, founder of DirectCreate, has spent three decades building infrastructure for India’s craft economy, and her platform answers the coordination problem the panel had just raised.
 
DirectCreate, built in 2014-15, connects roughly 8,000-9,000 artisans, craftsmen, and designers, and has been custom-coded to support more than 700 individual craft forms. Its project list makes the case for scale: the cultural design of India’s new Parliament building, including a year and a half of research into jali patterns sourced from Sanjhi craftsmen and the Roheda tree motif; the ₹500 crore restoration of Jal Mahal in Rajasthan, a public-private project that turned a sewage dump into a landmark over three years and 350 craftsmen; and Swadesh Bazar, a showcase built for an Ambani family wedding that coordinated 650 craftsmen from West Bengal to produce 3.5 lakh Sholapath flowers within 45 days, workable only because the platform could track and assign that volume of work at speed. On the retail side, DirectCreate’s collaboration with Fabindia produced a stackable thali line that became one of the brand’s top-selling tableware items.
 
The platform’s reach extends into education too, through a winter semester with the Rhode Island School of Design where students spend three weeks living and working alongside craft communities.
 
Lunkad pushed back directly on a line she said has stayed with her for years, from a conversation with Anand Mahindra: “Creativity can never be scaled up.” Her counter-argument is that decentralised, well-paid craft production, not mass piecework, is the model that scales India’s creative economy without hollowing it out. She was equally direct about where DirectCreate still falls short: limited reach in South India and Bengal, largely because of language and localisation gaps that haven’t been solved yet. Her closing point echoed Nair’s talent argument from the panel: no single organisation can run design, supply chain, and operations at once, and collaboration between people who are each good at one part of it is the sector’s biggest opening.

Four takeaways from the session

📌 India owns the skill, not the brand Kolhapuri chappals sell for ₹1.2 lakh under Prada’s name, the fix is shifting government support from preserving craft to promoting it as a business.

📌 Capital is scarce, talent is scarcer 13 non-metro cities visited, zero fundable founders found, which points to funding structures beyond standard VC: revenue-share, IRR-then-exit, community capital.

📌 The sector has no breakout story yet No cultural-brand equivalent of Ola exists to pull capital and talent in behind it, so the real fix is telling the success stories that already exist.

📌 Coordination technology can scale craft without piecework No single organisation can run design, supply chain, and craft together, DirectCreate solves that as a shared platform connecting artisans, designers, and buyers.

Culture returns to Lucknow on 27-28 October

Culture & Craft Economies runs again this October, this time with Sanjay’s brand-ownership argument, Nair and Verma’s funding and talent data, and Lunkad’s evidence that a working platform already exists, all on the table from the last edition. Lunkad has spoken at Sankalp Bharat before, and the track sits alongside Climate & Circularity, Capital & Blended Finance, and Compute & AI for Inclusion through the two-day summit.
 
The summit has facilitated more than $800 million in investment and engaged over 150,000 stakeholders across 5,000-plus enterprises supported since it began. The 2026 edition includes the Sankalp Bharat Awards, with a Cultural Enterprise Builder category recognising ventures doing exactly the kind of brand-building work this session argued India still lacks.
 
[Editor’s note: That conversation continues at Sankalp Bharat 2026. Culture & Craft Economies runs as one of four tracks this October, back in Lucknow.
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