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Latin America; Middle East / North Africa; Subsaharan Africa; Southeast Asia

Mercy Corps - Social Venture Fund Mercy Corps sees complex global challenges as an invitation: to pioneer paths out of poverty, to forge new partnerships, to create solutions that break through entrenched challenges. But the traditional grant-based model of funding international development is limiting. It rarely promotes the flexibility and experimentation required to test new models — models that could deliver social benefit to millions of people in the developing world. Mercy Corps’ Social Venture Fund provides early-stage financing and post-investment support to create and grow scalable, self-sustaining businesses that improve people’s lives in an enduring way. We do this by pairing our deep, on-the-ground insight into local customs and markets with a unique blend of capital and targeted business expertise. Capitalized by philanthropic contributions, we structure the Mercy Corps Social Venture Fund so that our highest-potential emerging ventures receive the early-stage support needed to learn, adapt and grow. Those that demonstrate financial sustainability, social impact and scale in the proof-of-concept and acceleration phases are connected with investors for follow-on funding to reach commercial viability.

International Development Agency / Development Finance Institution; Investment Fund

OVERVIEW

Description

Mercy Corps sees complex global challenges as an invitation: to pioneer paths out of poverty, to forge new partnerships, to create solutions that break through entrenched challenges. But the traditional grant-based model of funding international development is limiting. It rarely promotes the flexibility and experimentation required to test new models — models that could deliver social benefit to millions of people in the developing world.

Mercy Corps’ Social Venture Fund provides early-stage financing and post-investment support to create and grow scalable, self-sustaining businesses that improve people’s lives in an enduring way. We do this by pairing our deep, on-the-ground insight into local customs and markets with a unique blend of capital and targeted business expertise.

Capitalized by philanthropic contributions, we structure the Mercy Corps Social Venture Fund so that our highest-potential emerging ventures receive the early-stage support needed to learn, adapt and grow. Those that demonstrate financial sustainability, social impact and scale in the proof-of-concept and acceleration phases are connected with investors for follow-on funding to reach commercial viability.

Mercy Corps launched the Social Venture Fund (SVF) in 2015 to fill a critical gap (the “Pioneer Gap”) in the impact investing market for seed and early stage social venture startups. In its first year, SVF completed six investments, becoming one of the most active early stage impact investors in both Indonesia and Kenya.

During the same time, Mercy Corps became a founding member of the INGO Impact Investing Network, a consortium of more than 40 INGOs that are working together to generate and share knowledge about how INGOs are using private investment capital to advance their work in solving pressing global development challenges. This group believes that impact investing—the investment of capital to drive measureable social, economic, and environmental as well as financial returns—presents a compelling opportunity to achieve increased scale, innovation, sustainability, and partnerships in international development. The INGO Impact Investing Network’s first report that was released in July 2016 provides in-depth study of the current impact investing landscape among INGOs in the international development sector.

As Mercy Corps, and others, continue pioneering this approach, we plan on sharing our insights regularly with all interested stakeholders. Mercy Corps will release case studies on our investments highlighting the unique value we bring as an investor, how we’ve connected them to Mercy Corps’ larger platform and how we can improve in the future.
We hope you will join us on our journey to empower local entrepreneurs to solve big development challenges.

FUNDING TYPES AND CRITERIA

Provides direct investment

INVESTMENT RANGE:

$50,000 - $300,000

FUND SIZE:

$2,000,000

INTERESTED IN THESE SECTORS

Agriculture; Distribution / Supply Chain; Employment, Livelihood, Income Generation; Financial Serv./Inclusion, Microfinance; Training, Technical Assistance Services; Women, Girls

Stages

  • 4) Early Customer Traction, Revenue
  • 5) Starting to See Strong Revenue Traction
  • 6) Solidifying Operations

social vs. financial return preference

  • 3: Balanced

Types of entities

  • For Profit

providing funding for these regions

  • Latin America
  • Middle East / North Africa
  • Subsaharan Africa
  • Southeast Asia

funding types

  • Convertible
  • Equity

DEALS

TEAM MEMBERS

Team

Photo of Michael MacHarg

MICHAEL MACHARG

Michael serves as Senior Advisor to the Social Ventures team at Mercy Corps.

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