This year in social enterprise: Weekly review 12/19

As the year draws to a close, we like to reflect on the state of the space in which we operate. Social enterprise was, and continues to be, a nascent industry, but has come a long way in the last five years. This week, we’re looking at the updates and progress the industry has made and the methods we’re putting in place to grow.

2014 in Impact Investing: The Big Bang and its Aftermath by Ben Thornley on Huffington Post
According to Thornley, co-author of The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism, impact investing experienced a “Big Bang” in 2014, reaching and surpassing its tipping point and ceasing to be an insider’s game. Today, ideas and practices surrounding impact investments are scattered around the globe. Thornley argues that this “Big Bang” will have ramifications for years to come, the most important of which being the idea of segmentation.

While the core of impact investing remains the same, the practice is becoming more segmented. Thornley cites four subgroups of social enterprises: first responders, solution specialists, early-stage innovators, and scale agents. Each of the four attracts different audiences and has different approaches to raising capital. Why is this important? Thornley suggests that as the market matures and segments become more specialized, it is crucial to think about roles and responsibilities in impact investing. In other words: “The Big Bang of impact investing makes listening and learning hot in 2015.”

The Face of Poverty by Christian Seelos on Stanford Social Innovation Review
Christian Seelos, scholar at the Stanford Center on Philanthropy and Civil Society, created a diagnostic framework called “the face of poverty” to act as a starting point for productive decision-making within social enterprises. Seelos noted that many social entrepreneurs and funders are relying on technical innovations and one-size-fits all “best practices” to solve the problems their ventures face in developing markets. This method means we collectively run the risk of limiting our understanding of the environment, and may not make the right decisions with regard to innovation and scale.

The framework consists of four dimensions that shape the face of poverty: economic, cognitive, normative, and power & politics. It aims to identify and explain the barriers that sustain an undesirable, change-resistant status quo. By understanding these barriers, Seelos hopes that entrepreneurs will have the tools to make informed, productive decisions about intervention design involving innovation and scale.

Working from the Inside Out: IDB’s inaugural conference on scaling corporate social enterprise explores building bridges by Carolina Tocalli on Next Billion
Last month, the Inter-American Development Bank and its partners organized the first-ever “Scaling Corporate Social Enterprise Conference” in Santiago, Chile. The purpose of the conference was “to initiate a social innovation ecosystem capable of generation hope for the most vulnerable sectors in the region” according to Hans Schulz, Vice President for the Private Sector at the IDB. At the conference, entrepreneurs reflected on the obstacles they experienced when attempting to scale their social change models and offered advice for ways to begin and scale social ventures.

This comes at an opportune time as Latin America undoubtedly needs specific and sustainable social inclusion. There are several inclusive business models in Latin America with talented stakeholders and institutions like IDB have redoubled their commitment to promote, strengthen, and finance an open innovation ecosystem to develop these key ventures to benefit society as a whole.

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Simpa Networks announces commercial debt financing to scale up its clean electricity solutions in rural India

FOR IMMEDIATE RELEASE

BANGALORE – 17 December 2014 – Simpa, which sells solar-as-a-service to energy-poor households and micro-enterprises in rural India, today announced that it has completed a $4 million debt financing round. The financing has been provided by Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, and by GDF Suez through their Rassembleurs d’Energies program.

An estimated 400 million people in rural India still do not have access to an electricity grid. Distributed solar-powered electricity systems are dramatically improving the quality of life for energy-poor families and promoting economic activity by enabling small businesses to extend their working days.

“Rural India is rising, and we are creating new opportunities to invest in its growth”, said Paul Needham, President and Co-Founder of Simpa Networks. “This new debt investment, the first of its kind in India, will help us scale our for-profit solution to the problem of energy-poverty. It validates our model and proves a pathway to mobilize commercial debt capital at scale. Clean electricity for rising rural India is an investible proposition.” Simpa operates in rural Uttar Pradesh, an Indian state with severe power deficit. The new debt facility will enable Simpa to reach 200,000 people with clean, reliable electricity
services.

“Simpa’s inclusive approach to spreading energy access makes them an ideal partner for OPIC’s impact-focused development investment strategy,” said Elizabeth Littlefield, OPIC’s President and CEO. “The kind of technological leap Simpa and like-minded innovators are achieving proves that off-grid, clean energy in emerging markets is not merely viable, but a true opportunity both financially and environmentally.”

“Globally, more than one billion people lack access to modern electricity. We invest in for-profit solutions that can scale to meet this challenge,” said Jérôme Broutin, CFO at GDF Suez Rassembleurs d’Energies. “In Simpa, we have an opportunity to support a growth stage company scale up its impact to reach tens of thousands more people with affordable, clean, renewable electricity.”

About Simpa Networks

Simpa Networks, operating in India as Simpa Energy India, pioneered the solar-as-a-service business model. Simpa customers make a small initial payment to get a solar electric system installed at their home or business. Customers then purchase “energy days” using a prepaid or pay-as-you-go mobile payment system. Upon completion of the contract, customers can take ownership of their systems, getting clean electricity free and clear. The model is enabled by Simpa’s patented technology platform. Since its inception, Simpa has sold over 770,000 energy days, delivered over 65 MWh, created over 2,800 full and part-time jobs in rural India, and saved over 75 tonnes of CO2 emissions.

Simpa is backed by notable international impact investors and development finance
institutions such as the Asian Development Bank, USAID-DIV, IFC, Overseas Private
Investment Corporation (OPIC), the Khosla Impact Fund (Vinod Khosla), Sorenson Impact Foundation (Jim & Krista Sorenson), Schneider Electric, GDF Suez Rassembleurs d’Energies, the HILTI Foundation, the DOEN Foundation, Village Capital and more.

Contact:

Priya Shah
+919322025000
priya.shah@simpanetworks.com

For further information, please visit www.simpanetworks.com
Twitter: @simpanetworks

Why We Invest in Ag Tech: Weekly Review 12/8 – 12/12

Farming may be one of the oldest industries, but there is no lack of opportunity for investment. Below are articles highlighting the need for innovations in agriculture, opportunities for investment, and the recent success of technology in the space.

Ag-tech could change how the world eats on Grand Haven Tribune

Venture capitalists are putting money into “ag tech” companies focused on anything from big data to drone technology, in an effort to feed the growing population without destroying the planet and turn a profit doing so.

“The food sector is wasteful and inefficient” said Ali Partovi, a Bay Area investor with stakes in multiple agriculture startups. “Silicon Valley has a hubris that says, ‘That’s stupid. Let’s change it.’” Investors and Entrepreneurs are working on doing just that. The booming activity around the ag tech sector has led experts to predict that its growth will outpace today’s hottest technologies in 5 or so years. In Q3 of this year, $269 million was invested into 41 deals in agriculture and food startups, double the amount invested during the third quarter last year, according to data from the Cleantech Group.“It’s going to be bigger than cloud software, it’s going to be bigger than Big Data, because everybody eats,” said Paul Matteucci, a partner at U.S. Venture Partners and founder of Feeding 10 Billion, a nonprofit organization focused on helping ag-tech entrepreneurs. Since 2009, investments in the sector have grown by an average of 63 percent a year.

Dozens of companies are creating technology to make farmland more productive and farming more efficient. Some are developing hardware or robotics, like Rowbot to automate farming practices while others are focused on software platforms, like OnFarm, that utilize data to inform management decisions. Farmers, for the most part, have welcomed new technologies into their world. “There is a kind of renaissance in technology in agriculture right now,” said Ryan Jacobsen, a farmer and executive director of the Fresno Country Farmers.

Surprise: Agriculture is doing more with IoT Innovation than most other industries by Jahangir Mohammed on Venture Beat

While growth in investments in agriculture technology is no secret, it’s a little known fact that farming has been, and continues to be, a leader in large-scale adoption for the Internet of Things (IoT). The global food challenge is pushing farmers to find better methods of feeding a population that’s expected to grow by 2 billion before 2050. From a business perspective, using IoT to improve farming practices makes sense. It improves operational efficiency, drives productivity, creates new revenue sources, and, ultimately, makes sustainability synonymous with profit.

Mohammed suggests, given the obvious benefits to farmers, the agriculture industry has emerged as a key testing ground for IoT strategy. There has been significant success in terms of productivity, pest control, conservation and continual value of service offerings beyond a product.

How young entrepreneurs are innovating in agriculture by Eleonora Crisafulli on News Hub

The ageing population of farmers has been, and continues to be, a global challenge. 50% of farmers in the US are 55 or older while in Europe the percentage of farmers under the age of 35 is incredibly low, 4.1% in the UK and 5.1% in Italy for example. However, young people involved in farming are beginning to bring their digital culture to the fields while tech startups are making agriculture their business. Crisafulli is calling it agriculture 2.0.

To support youth’s growing interest in agriculture, The EU Agriculture and Fisheries Council has just approved a document to support young farmers. The document will focus on access to credit, land and knowledge, and aims for generational change and innovation to invigorate the industry. In anticipation of more institutional incentives, the first push for innovation comes from young people who decided to bring their digital culture to agriculture, often combining ecommerce and organic farming. One such company is Contadini per passione, a group of entrepreneurs who grow an orange grove in Siciliy and use the web to promote and sell their products. 31-year-old founder Paolo Barbera commented on the new generation of agriculture, saying, “Arms aren’t enough. It is finally understood that agriculture also needs brains. It needs to involve new people, smart, dynamic, brilliant, so as to improve the relationship between innovation and tradition.”

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