Funding, areas of focus, impact and more
By Priya Thachadi
2017 was a year that demonstrated that the human spirit is stronger than ever in the face of adversity. Nowhere did I see this more strongly than in social entrepreneurs working across geographies and sectors in Southeast Asia. In Indonesia, I met entrepreneurs who had great products and exciting clients, but did not have the capital to buy machinery to generate volumes to match demand. In Cambodia, there were entrepreneurs who were looking to expand their market for organic produce but faced difficulties in pricing. In the Philippines, I met entrepreneurs who had strong product offerings, but struggled to find the risk capital to back them to test the market. In every single case, I saw the strength of the entrepreneurial spirit, unwavering with every setback, finding a window when doors were shut. And this gives me great optimism for 2018.
This is the year for action. All signs lead to it.
More capital in Impact Investing
The great news is that there is more and more capital being unlocked for impact investments. The 2017 Annual Survey by Global Impact Investing Network (GIIN) report identified $114 billion (INR 7225 biliion) in assets under management with 209 investors, and expected to grow further. 2017 also saw announcement from big donors on setting up of Fund of Funds – DFAT (Australia) announced its $40 million (INR 2535 million) Emerging Markets Impact Investment Fund to support early stage enterprises, expected to begin investments in 2018; Japan’s Sasakawa Peace Foundation announced a 10 billion yen (INR 5 billion) Asian Women’s Impact Fund, to benefit women and female entrepreneurs in Southeast Asia. Globally, TPG raised $2 billion (INR 126 billion) for The Rise Fund, a social impact private-equity fund, while Bain launched its $390 million (INR 25,000+ million) Bain Capital Double Impact fund. And a big announcement from the Ford Foundation that it has committed to invest $1 billion (INR 64 billion) over the next ten years in mission-related investments (MRIs), while the UN Social Impact Fund has recently launched in Egypt, Bangladesh and soon in the Philippines.
Women, gender, and gender lens Investing
2017 has seen gender equality re-emerge as a focus area for donors and impact investors. Gender issues and specifically, gender-lens investing will continue to be a prominent theme in 2018. With players like DFAT’s Investing in Women and Sasakawa leading the way in Southeast Asia, globally, the women’s movement will continue to move forward in various sectors. Just this week, women in Hollywood announced a new group, Time’s Up to fight sexual harassment, pay equity, for women across professions. The momentum is growing.
One of the key takeaways from 2017, for me personally, was to stop thinking of women just as beneficiaries, but to help create market systems where women have decision-making power. We need more women entrepreneurs, mentors, angels, investors, and market participants to create a more equal field. And we need to work hard to eradicate our ‘unconscious bias’ in our actions and decisions. And most importantly, that we must not forget the other side that is important in gender equality – men – who are an essential part of the solution.
SDGs are still important
2018 will see the High Level Political Forum on Sustainable Development with the theme ‘Transformation towards sustainable and resilient societies,’ including a three-day ministerial meeting of the forum to bring focus on ‘implementation and revitalization of the Global Partnership for Sustainable Development’, giving implementation of SDGs a boost across the globe. 2017 saw many businesses aligning their CSR strategy to SDGs, which is expected to continue in 2018. For entrepreneurs, looking to solve problems, aligning to SDGs will prove effective as more and more social enterprise competitions and impact investment diligence is focused on SDGs.
Recognizing the ‘innovation blindspot’
There is no doubt that entrepreneurship is on the rise, more people, young and old are building startups to solve problems innovatively. However, as Ross Baird’s 2017 book points out, many of us as investors and field builders maybe have ‘innovation blindspots’ – our biases, patterns and funding models that prevent us from finding, funding and backing entrepreneurs that are solving the most pressing problems of today. Baird’s analysis raises some critical questions in how we pick enterprises (Are we unconsciously looking for those that look familiar, and feel safe?) and where we find new ideas (there is no doubt that investments usually are concentrated in big cities). In 2018, is it possible to break that trend? I plan to kick off my 2018 deal sourcing keeping these questions in mind, and building partnerships to address them.
As individuals and organisations, we have a brand new year to reset goals, build on past work and create new opportunities. My personal wish for 2018 is that more philanthropic investors come on board to address the key gaps in early stage capital, so we can create and support more innovative social entrepreneurs.
Across the globe, people are exasperated by the deep gaps in wealth and opportunity. So, let’s use our energy to create more solutions, build more inclusive organizations, create more jobs, address our blindspots, and beat all those challenges that come our way.
Bring it on, 2018.