Hardly 3 months since the last investment trip, another 4 deals have been closed. Lydia (NLS), Florence (Yellow Star), Abu (Village Energy) and Dan (Jakana) together received $185,000 in loans to grow and mature their businesses.
Extreme drive and commitment capture the hearts of private investors
When looking at the 4 entrepreneurs who received investment, they all have one thing in common : they are visionary entrepreneurs on a social mission. Each one of them started their company, first and foremost, to solve a pressing issue. Whereas Jakana and Yellow Star work hard to generate income for the rural population, Village Energy’s objective is to increase access to affordable lighting and NLS ensures that medical and hazardous waste gets disposed of sustainably. None of them took the easy route, trying to make a quick buck. Instead, driven by sincere passion, they focus on delivering a REAL solution, adapting and solidifying their business model as they move forward.
$185,000 in funding unlocks additional $305,000 in commercial and philanthropic funding
Apart from their drive and perseverance, there is another striking commonality. Three out of these four entrepreneurs managed to unlock additional funding as a result of the funding that came in through BiD Network, either via a (matching) grant, or via commercial lending. Some of the sources of additional funding include the Netherlands Embassy, the Abi Trust, UKAID and USADF. At BiD Network, we hope that private investors have this catalytic effect, by providing credibility and confidence to early growth businesses. It is very rewarding to see that this works out in practice.
Blended finance offers solutions to early growth businesses
Recently there has been increased attention for blended finance, using public funds or philanthropic capital to de-risk or leverage private investments in emerging and frontier markets. As shown by the examples above, we see that early growth businesses are often served via ‘blended finance’ – solutions. Although the amounts are relatively small, and the investments are not always coordinated, it is clear that the combination of grant – and commercial funding is an effective solution to serve early growth businesses. In our examples, we see that private investors lend the legitimacy and credibility to a company, which in turn helps to unlock grant funding, whereas vice versa, grant funding helps to convince a private investor by funding some business activities that are essential but do not directly contribute to turnover and profit. As BiD Network we take a deep interest in this topic and we now explore how we can further facilitate blended finance solutions for our clients.