Building the missing middle: Sanjay Enishetty wants to build the institutional infrastructure for India’s SMEs

After straddling two sharply different worlds, venture capital and large-scale retail operations at Naturals Salons, Sanjay Enishetty noticed a glaring asymmetry in India’s business ecosystem. Startups benefit from accelerators, angel networks, and institutional funding, but mid-sized, revenue-generating businesses often scale without such support. With ScaleMe Network, Enishetty intends to construct India's "institutional infrastructure" for the underserved Rs 25–100 crore operator aspiring to reach Rs 500 crore. In this conversation, he explains why India does not have a startup problem, but a scaling problem, and why fixing the “missing middle” may be critical to the country’s 2047 ambitions.

Economic Times (ET): You worked with Naturals Salons, a leading salon chain with 800+ outlets,as CEO and you were earlier a VC. What personal experiences during that journey convinced you that India's SMEs need an institutional platform like ScaleMe?
Sanjay Enishetty (SE): When you sit on the VC side, you see a hundred pitch decks a month. Most of them are from startups chasing the next funding round. The language is "Series A," "burn rate," "TAM." There is an entire ecosystem built around that world, accelerators, incubators, demo days, angel networks.

Then I moved to the operating side, running Naturals retail salon chain, a business with over 800 outlets, hundreds of employees, thousands of professionals, franchise partners across the country, real P&L responsibility. And I realised something that stayed with me: the founders running businesses at the Rs 25–100 crore level, the ones actually creating employment, paying GST, building supply chains, have almost no institutional support system.


Nobody is building accelerators for them. Nobody is organising peer networks for them. Nobody is preparing them for their next phase, whether that is raising institutional capital, professionalising operations, or going public. The startup ecosystem has Y Combinator, Sequoia scouts, and TiE chapters. The Rs 50 crore manufacturer in Rajkot or the Rs 80 crore services company in Coimbatore has nothing equivalent.

That asymmetry is what convinced me. India does not have a pipeline problem. It has a scaling problem. We have millions of enterprises but very few that successfully transition from Rs 50 crore to Rs 500 crore. ScaleMe exists to build the institutional infrastructure that makes that transition possible.


ET: India has over 63 million MSMEs, yet only 0.3% qualify as medium enterprises and they drive nearly 40% of MSME exports. Why has this “missing middle” persisted for so long, and what structural flaws are we ignoring?
SE: The missing middle is not an accident. It is the outcome of a system that was designed, often with good intentions, to protect small businesses rather than help them grow. For decades, our policy framework has incentivised staying small. There are regulatory thresholds where compliance costs jump disproportionately the moment you cross a certain revenue or employee count. Labour laws change, tax scrutiny intensifies, and the informal advantages that helped you survive at Rs 10 crore become liabilities at Rs50 crore. So, founders rationally choose to stay below the radar.

But the structural flaws go beyond regulation. There are at least three we consistently ignore.

First, advisory access. Large corporations have boards, consultants, and institutional networks. Startups have mentors, VCs, and accelerators. The Rs 25–100 crore SME founder has neither. They are making critical decisions about market expansion, capital structure, and leadership transitions based on instinct and informal advice.

Second, capital architecture. The credit gap in the MSME sector is estimated at Rs 20–25 lakh crore. But the problem is not just quantum, it is the design of capital. SMEs at the growth stage need a mix of equity, structured debt, and mezzanine instruments. What they get offered is collateral-backed term loans. The financial products simply do not match the growth trajectories of these businesses.

Third, aspiration infrastructure. There is no visible, credible pathway for a Rs 50 crore business to envision itself as a Rs 500 crore enterprise. No peer network of operators who have made that journey. No institutional platform that says: here is the roadmap, here are the people who have done it, and here is how you access the resources.

The NITI Aayog's 2025 report on medium enterprises called them "strategic actors in India's transition towards self-reliance." I agree. But strategic actors need a stage. That is what ScaleMe is building.


ET: Multiple SME forums and industry bodies already exist. What makes this moment different, and why do you believe ScaleME can succeed where others have struggled?
SE: I have deep respect for what existing industry bodies have done over the years. They have played an important role in advocacy, policy dialogue, and representation.

But let me be honest about where the gap lies. Most existing forums are structured around representation, they speak on behalf of SMEs to the government and to regulators. That is valuable, but it is not what keeps a Rs 50 crore founder up at night. What keeps them up is: how do I build a leadership team that does not depend entirely on me? How do I raise Rs 30 crore without diluting control irresponsibly? How do I prepare my business for an institutional investor's due diligence?

These are operational, strategic, and deeply personal questions. They require a different kind of platform, one built around peer learning, institutional advisory, and capital connectivity, not around annual conferences, and policy submissions.

What makes this moment different is the convergence of three things. One, India's capital markets are finally ready for SMEs, NSE Emerge has crossed over 700 listings and facilitated over Rs 21,000 crore in fundraising. Two, institutions like ISB-CBI are actively looking to engage with the mid-market segment, not just MBAs and large corporations. Three, there is a generation of SME founders who are more ambitious, more digitally connected, and more willing to invest in their own growth than any generation before them.

ScaleMe is not trying to replace existing bodies. We are building something that did not exist,a curated, operator-only growth ecosystem with institutional backing. The distinction is important.


ET: You have brought together Indian School of Business - Center for Business Innovation (ISB-CBI) and NSE Emerge as founding collaborators. How did you convince such institutions to align with a relatively new platform, and what does their involvement fundamentally change for SME operators?
SE: I would push back gently on the framing. I did not have to "convince" them in the traditional sense. What I had to do was articulate a problem clearly enough that institutions which were already thinking about this space saw ScaleMe as the right vehicle.

ISB-CBI, through its Centre for Business Innovation, has been working on questions around business model transformation and scaling for years. Their research and faculty engagement is world-class, but they were looking for a way to take that intellectual capital beyond the classroom and into the hands of operators who need it most. ScaleMe gave them that channel.

NSE Emerge has built a remarkable platform, over 700 SME listings, over Rs 21,000 crore raised. But they also recognise that the pipeline of IPO-ready SMEs needs to be deeper, better prepared, and more governance-aware. ScaleMe's focus on the Rs 25–100 crore segment, the natural pre-IPO cohort, aligned perfectly with what they are trying to build on the capital markets side.

What does this change for the SME operator? It changes the entire credibility equation. When an SME founder walks into a room convened by ISB-CBI and NSE Emerge, with a curated peer group of operators at similar scale, the conversation is fundamentally different from anything they have experienced before. They are not being sold to. They are being invested in, intellectually, strategically, and in terms of capital market access.

That is what institutional collaboration does. It converts an initiative into infrastructure.


ET: SMEs often say capital is their biggest challenge. You argue that advisory and strategic clarity are equally critical. In your experience, which typically breaks first, capital access or leadership capability?
SE: Leadership capability. Almost always. I have seen this pattern repeatedly, both from the VC side and the operating side. A founder raises capital, but does not have the strategic clarity on where to deploy it. Or they get a term sheet, but their governance and financial reporting is not ready for the scrutiny that comes with institutional money. Or they scale revenue, but the organisation underneath, the leadership team, the processes, the decision-making frameworks, cannot keep pace.

Capital without strategic clarity is actually dangerous. It accelerates mistakes. I have seen businesses raise Rs 50 crore and destroy value because they did not have the advisory infrastructure to deploy it wisely.

The real sequence for most SMEs should be: first, get strategic clarity, understand your growth levers, your unit economics, your market positioning. Second, build leadership depth, so the business does not collapse if the founder takes a two-week holiday. Third, once you have those foundations, go raise capital from a position of strength, not desperation.

This is exactly why ScaleMe's Four Unlocks framework begins with strategic clarity and leadership depth before addressing capital readiness. We are not saying capital does not matter. We are saying that if you fix the first two, capital follows, and it follows on much better terms.


ET: ScaleME is sharply focused on operators in the Rs 25–100 crore band aspiring to reach Rs 500 crore. Why this specific revenue bracket, and what differentiates this cohort from early-stage startups or large corporations?
SE: This band is not arbitrary. It is based on a very specific observation about the Indian business landscape.

Below Rs 25 crore, businesses are typically still in survival mode, figuring out product-market fit, managing cash flow week to week, and building basic operational muscle. They need a different kind of support, more foundational, more hand-holding.

Above Rs 100 crore, businesses generally have access to institutional advisors, investment banks, and professional management. They are visible to the financial ecosystem.

The Rs 25–100 crore band is where businesses have proven their model, demonstrated consistent revenue, built real teams, and established market presence, but they have not yet made the leap to institutional scale. This is the most critical and least supported segment of the Indian economy.

What differentiates this cohort from startups is that these are profitable, operating businesses. They are not burning cash hoping for a valuation mark-up. They are generating employment, paying taxes, and building tangible economic value. Their challenges are fundamentally different, they are not looking for product-market fit, they are looking for scaling frameworks, capital structure optimisation, and governance readiness.

What differentiates them from large corporations is that they are still founder-dependent. The founder is the chief salesperson, the chief decision-maker, and often the chief firefighter. The transition from a founder-led enterprise to a leadership-driven organisation is the single most important transformation for this cohort. And almost nobody is helping them make it.

That is the white space ScaleMe occupies.


ET: With NSE Emerge onboard, are you effectively positioning ScaleME as a pre-IPO grooming ground? What governance, compliance, or mindset shifts do Indian SMEs most underestimate when preparing for public markets?
SE: Ans: Pre-IPO grooming is one dimension of what we do, but I would not reduce ScaleMe to that. Not every SME should go public, and not every SME wants to. Our job is to help operators understand all the pathways available to them,IPO is one, strategic M&A is another, institutional PE is another. The right path depends on the business, the sector, and the founder's own vision.

That said, for those who are IPO-bound, the preparation gap is enormous. And it is not where most people think it is. The compliance piece, SEBI regulations, financial reporting standards, board composition, is actually the easier part. It is procedural. You can hire the right advisors and get it done.

What SME founders underestimate is the mindset shift. Going public means you are no longer running your company for yourself and your family. You are running it for shareholders. Every quarter, your numbers are scrutinised. Your governance is visible. Your decisions are questioned.

Three specific areas where I see the biggest gaps. First, financial transparency, many SMEs have multiple books, informal cash flows, and tax structures that are optimised for a private company but completely incompatible with public market expectations. Cleaning this up takes two to three years, not two to three months.

Second, board governance, the idea of having independent directors who actually challenge the founder is alien to most SME operators. They are used to being the final word. Learning to govern collaboratively is a cultural shift, not just a compliance requirement.

Third, investor communication, public market investors want consistency, predictability, and clarity. SME founders who are brilliant at building businesses are often not equipped to communicate their strategy to institutional investors in the language the market expects.

This is precisely the kind of preparation that ScaleMe, in partnership with NSE Emerge, is designed to provide, not as a last-minute exercise before filing the DRHP, but as a multi-year capability building journey.


ET: You have emphasised that ScaleME is not a conference or events company. What does a truly year-round SME growth infrastructure look like in practice?
SE: The summit is the front door. What happens after the summit is where the real value lies.

Let me describe what we are building. ScaleMe's year-round infrastructure operates across three layers.

The first layer is the network. Once an SME operator is part of the ScaleMe network, they have ongoing access to a curated peer group, founders at similar revenue scale, facing similar challenges, across different sectors. This is not a WhatsApp group. It is a structured engagement model with regular peer circles, sector-specific roundtables, and founder-to-founder knowledge exchange.

The second layer is advisory. Through our partnership with ISB-CBI, we are building access to institutional-grade strategic guidance, on topics ranging from organisational design and capital structure to succession planning and market expansion. This is not one-off mentorship. It is ongoing, contextual, and calibrated for the Rs 25–100 crore operator.

The third layer is capital connectivity through ScaleMe's curated investment community. We built a platform that connects vetted SME operators with relevant capital opportunities including M&A, institutional equity, debt instruments, and pre-IPO funding. The key word is "curated." We are not running a marketplace. We are facilitating informed connections between operators who are capital-ready and investors who understand the mid-market.

The summit creates the initial cohort, establishes trust, and demonstrates value. The year-round infrastructure sustains it. If we do this right, every SME operator in the ScaleMe network should feel that they have a board of advisors, a peer group, and a capital desk, resources that were previously available only to large corporations.


ET: Since the platform is curated and invite-only, how do you respond to criticism that this may become an exclusive club rather than a broad-based SME empowerment movement?
SE: Ans : I understand the optics, and I take the question seriously. But I would challenge the underlying assumption, that broad-based always means better. Let me explain.

If you put a Rs 5 crore business and a Rs 80 crore business in the same room, neither benefits. Their problems are different, their capital needs are different, their leadership challenges are different. A mixed room creates networking without depth. We have enough of that in India.

Curation is not exclusion. It is relevance. When we say invite-only, what we mean is: every person in the room is an operator at a similar stage, facing similar scaling challenges, and serious about growing. That specificity is what makes the peer learning genuine and the advisory actionable.

Now, does this mean ScaleMe will only ever serve a narrow segment? No. Our ambition is to build multiple cohorts, segmented by revenue stage, by sector, by geography. As the platform matures, we will expand downstream and upstream. The Rs 10–25 crore cohort is a natural next step. Regional chapters across cities beyond the metros are part of the long-term plan.

But you must start with focus. You have to prove the model with one cohort before you scale it. The worst thing we could do for India's SME ecosystem is build another generic platform that tries to be everything to everyone and ends up being useful to no one.

So yes, we are curated. And I see that as a feature, not a limitation.


ET: India's aspiration of becoming a developed economy by 2047 hinges on mid-market enterprises scaling globally. If ScaleME succeeds over the next decade, what measurable change would you want to see in India's SME landscape?
SE: I think about this in three measurable outcomes.

First, the number of SMEs that successfully transition from Rs 50 crore to Rs 500 crore in revenue. Today, that transition rate is abysmally low. If ScaleMe can contribute to even a few hundred enterprises making that leap over the next decade, the compound employment and GDP impact would be significant. Each business that scales from Rs 50 crore to Rs 500 crore creates hundreds of direct jobs and thousands of indirect ones.

Second, the depth of the SME IPO pipeline. NSE Emerge has done remarkable work, over 700 listings, over Rs 21,000 crore mobilised. But the pipeline of truly IPO-ready, governance-compliant, institutionally prepared SMEs needs to be ten times deeper. If ScaleMe can serve as the grooming ground that consistently feeds well-prepared companies into the public markets, that would be a structural contribution to India's capital market depth.

Third, and this is perhaps the most important, a shift in the aspiration level of the Indian SME founder. Today, too many operators at the Rs 50 crore level have mentally accepted that this is their ceiling. They do not see a credible pathway to Rs 500 crore. If ScaleMe can demonstrate, through real examples and real peer networks, that the pathway exists and is achievable, that shift in ambition may be the most powerful long-term outcome of all.

India's Viksit Bharat 2047 vision fundamentally depends on what happens to the next ten thousand mid-market enterprises. ScaleMe is being built to ensure they have the infrastructure to scale.


ET: How are you funding the initiative and your revenue generation plans?
SE: At this stage, ScaleMe is founder-funded. The initial investment in building the platform, securing institutional partnerships, and executing the summit has come from my own capital. I believe that if you are asking SME founders to trust you with their growth journey, you should have your own skin in the game first.

Going forward, the revenue model is built around three streams.

The first is membership and community access. As the ScaleMe network matures, there will be a structured membership offering for SME operators that provides year-round access to peer cohorts, advisory resources, and institutional engagement. This will be priced at a level that reflects genuine value, not a token fee, but a meaningful investment that ensures commitment from both sides.

The second is Capital connect. As the investment community platform scales, there are natural revenue opportunities in facilitating capital transactions, connecting SME operators with the right investors, debt providers, and M&A advisors. This is a fee-based model aligned to outcomes.

The third is institutional partnerships and programming. The collaboration with ISB-CBI and NSE Emerge opens opportunities for co-created programmes, executive education, sector-specific bootcamps, IPO readiness workshops, that can be offered as premium, high-value engagements for qualifying SME operators.

I want to be clear about one thing: ScaleMe is not being built as a not for profit. It is being built as a sustainable, commercially viable platform. I believe that is the only way to ensure longevity and quality. If the platform does not generate value that operators are willing to pay for, it does not deserve to exist. That commercial discipline is core to how we think about this.