The Social Capital Index (SCI) tracks investments in the social capital market, including social enterprise, fair trade, digital inclusion, and selected clean tech and microfinance investments.
Welcome to the April 2008 edition of DealSpace, a timely tracking of investments in social enterprises and funds that do business to create a better world. In this edition we have added six new investments (highlighted in yellow) collectively worth $59.3 million: five in social enterprises and one in a social venture fund.
March and April saw $9.5 million in new investments. These investments went to businesses working in such areas as microfinance, software for nonprofits, and fair trade tea. Some of the highlights of recent deals include Good Capitals own Social Enterprise Expansion Fund investment of up to $2.5 million in Better World Books, a social enterprise that collects donated books and sells them online to fund literacy initiatives worldwide. VolunteerMatch, an online service that matches volunteers to worthy causes, just reached $3 million in commitments for its $10 million fundraise. To see the full listing, click here.
This is the debut edition of Deals in Play. This first edition lists nine social enterprises that are actively seeking capital to either get their business off the ground or expand an already proven business model. The enterprises are working in diverse industries and social sectors, from financial services to software, and from sustainable development to independent music to education. Though diverse in method and mission, all enterprises listed share a commitment to bring new ideas, resources, and solutions to the movement to create an equitable economy and a sustainable world.
Below is the SCI asset class fan, which shows a spectrum of the asset classes included in the SCI, from equity to debt and including grants. Eventually we will categorize the entire Index using this fan. The full fan is available here. Also available is the fund matrix, where various social funds are described in more detail. Like all the rest of the resources in the SCI, it is a work in progress, and will become fuller and more complete over time.
This post is the third in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I describe how this strategy could transform the health sector in emerging economies.
Last Mile Health Care Delivery
Talk to people in the rural communities of southern Mexico, in the new urban communities on the southern edge of Bogota, or in almost any village in rural Africa about getting decent access to healthcare, and their answer is the same: it usually costs more to get to a clinic, a doctor's office, even a pharmacy, than the cost of the service itself. In Bogota, most of the government-supported health services are in the north of the city, such that it can cost people in these new refugee communities a day's work plus bus fare across town and back to get help. Lack of access defines part of the last mile health care dilemma, and that means distributional business models, such as franchising, can be important.
Talk to Health Stores in Kenya, an enterprise trying to staff small pharmacies with nurses, and another part of the problem becomes clear: the sheer lack of doctors, nurses, and pharmacists in emerging markets. There are not anywhere close to the number of skilled professionals needed to cover rural areas, and these health workers overwhelmingly refuse to live either in rural areas or in urban slums. So technologies, organizational models, and legal changes that enable local diagnosis and remote practice by doctors and pharmacists could play a critical role.
Still a third factor leaps out from the data in The Next 4 Billion report that shows clearly that low-income households spend between a third and a half of their out-of-pocket health care expenditures on drugs. They typically don't go to doctors or clinics or hospitals, but rather to pharmacies or some other source of medicines and seek to self-medicate. That means they often get a guess as to what's wrong with them instead of a diagnosis.
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This post is the fourth in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I discuss the common characteristics that make BoP business models in different sectors scalable solutions.
Searching for Transformational Models in New Sectors
If building the missing infrastructure could transform rural connectivity and health care, what about access to clean drinking water, especially for smaller rural and peri-urban communities? That's a proposition that WRI and Santa Clara University's Global Social Benefit Incubator are researching. There are some promising models in the field, such as Water Health International, that are beginning to scale. There are a number of additional enterprises, five of which will be mentored intensively in this year's incubator class. There are some promising new filtering technologies that use less energy than existing technologies, as well as other interesting approaches that have yet to be applied in emerging markets; we are undertaking a detailed comparison of both existing and newer technologies.
A number of community-initiated business models have produced good results, but they aren't easily replicable and don't scale. So we are analyzing both franchising and public-private partnership business models. Many of the elements that make rural connectivity and rural health care promising appear to be present in the water sector. It is too early to say what will emerge out of the research, but the scale of the unmet need is clear - a billion people without access to clean drinking water.
And after water, why not BoP energy? Our preliminary thinking is that there at least three sub-sectors of interest: Off-grid power and lighting, from mini-hydro to LED lighting; efficiency improvements in energy-using devices, such as cook stoves and motorbikes; and locally-grown, produced, and consumed biofuels that don't compete with food. We know of prototype enterprises and projects in each sub-sector, some of them already beginning to scale. We believe that the recent, rapid evolution of technology options will continue and can be adapted for the BoP. And we know that the unmet need is very large.
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Do you run a small-to-medium size enterprise operating in India, Indonesia, China, Brazil or Mexico? Does your company have an innovative business model that delivers strong environmental and social benefits? Are you seeking debt or equity capital in order to grow your business?
If so, apply for the New Ventures program in these countries. The New Ventures program of the World Resources Institute supports the growth of businesses that deliver social and environmental benefits by providing business advisory services and access to capital. Enterprises that have been supported by New Ventures have raised $120M in capital. Moreover, 98% of New Ventures enterprises are still in operation.
The application deadlines for each country are:
- India: May 15th
- Indonesia: May 16th
- Mexico: June 30th
- China: TBD
- Brazil: TBD
For more information and access to the application form, please visit the specific country websites. For an English language version of the Indonesia application form, please contact slall@wri.org.
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This post is the second in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I tell the story of a rural connectivity pilot project; an example of this new model for development in action.
A Last Mile Model for Rural Connectivity
Son Tay commune, Quang Ngai Province. I was sitting across a table in a remote rural outpost of Vietnam, negotiating (via a translator) with the manager of a local radio station about access to his tower. He asked a series of technical questions and seemed satisfied with the answers, but then he wondered aloud: "Can we get Internet access here?" He didn't just want it for the radio station, it emerged, but for the surrounding small community - even though nobody there yet owned a computer. The manager understood that internet access could help transform their opportunities. And when we agreed to mount a small antenna to serve the community, the tower was ours.
The negotiation was part of a two year long process to pilot a novel approach to rural connectivity. It involved building an advanced, broadband network in three communes (groups of villages) in a very poor province in central Vietnam to provide Internet-based phone service and Internet access. Quang Ngai Province has no Internet access for its million-plus population outside of the provincial capital, and phone ownership is about 3 percent.
But the province does have an AUSAID-funded rural development project (RUDEP) that had built trust by doubling farmer's incomes in many communes, and optical fiber to every district capital (owned by the national electric utility, EVN, which also owns a mobile phone company, EVN Telecom). Ultimately all of these became partners in the effort, as did USAID's Last Mile Initiative, Intel and other equipment providers.
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Position: Senior Researcher, BoP Energy Sector Analysis, Institute for Financial Management and Research (IFMR)
Location: Chennai, India
Organization: The Centre for Development Finance of the IFMR is a development economics research and action centre. It was formally established in February 2006 with a mission to support development finance - the conversion of finance into development. We primarily focus on sustainable models for financing infrastructure and services, as these are essential inputs into any vision of equitable development.
Description: The senior researcher will be responsible for research and related activities analyzing the Base of the Pyramid energy sector in India. The senior researcher would be expected to undertake a comprehensive study to quantify BoP energy needs and existing uses, conduct stakeholder and expert interviews, conduct focus groups, and perform a competitive analysis of emerging and established off-grid and household energy technologies in order to develop a strategy and series of projects for improving access to clean, sustainable energy at the BoP.
For more information, see the full job description. To apply, send a cover letter, writing sample, and resume to shaanti.kapila@ifmr.ac.in.
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