Businessweek on how the emergence of entrepreneurs targeting the BOP (as well as the relentless hunt for deal flow) is causing VCs in India to broaden the scope of their investments.

The fishermen from the Indian village of Chidambaram live a hard life. They sleep most of the day, then spend the night out on the water. For light during those dark hours, they have long depended on wobbly kerosene lamps that were easily blown out or, worse, toppled by the wind, risking deadly fires on their boats.

But these days, the kerosene lamps have been replaced with MightyLights, $50 solar-powered fixtures. “I save 100 rupees [$2.50] a month on kerosene alone,” says K Kanimuri, a fisherman’s wife, who also uses the MightyLight in her makeshift kitchen. With her savings, she now makes and sells candles.

Kanimuri and her fellow villagers may not know it, but the change in their fortunes is rooted in global finance. MightyLight is the brainchild of New Delhi-based Cosmos Ignite Innovations, a Stanford University-incubated startup by Matthew Scott and Amit Chugh that aims to provide simple products for the world’s poorest people. And Cosmos got its start with backing from Vinod Khosla, a veteran Silicon Valley venture capitalist. Now Cosmos is in talks with other groups, including London-based 3i Group (TIGRF) and eBay (EBAY) founder Pierre Omidyar, for a second round of funding. “For us, it’s not just the light, but using a sustainable model to affect social change,” says Scott, chief executive of Cosmos.

Just a few years ago, most venture capital funds focused on pure technology companies operating in industrialized countries. But now, VCs are starting to look for opportunities in the developing world. They believe that it isn’t just the tech plays that are scalable and sustainable. What was earlier shunned as small is suddenly a potential business opportunity.