Acumen Fund Co-Invests $2.2 Million in Ugandan Cotton Ginnery
Friday, January 14, 2011
The New York-based Acumen Fund–a non-profit investment firm that seeks social and financial returns while helping reduce global poverty–is now in the East African country of Uganda. The Gulu Agricultural Development Company (GADC) will receive $2.2 million from a co-investment between Acumen Fund and Root Capital, with the goal of improving the company’s organic cotton output and helping civil war refugees in the region maintain smallholder farming livelihoods.
“We’re looking to help them go beyond just selling cotton to providing them with a means of livelihood when it is not crop season, such as sesame production,” Acumen Fund’s East Africa Manager, Biju Mohandas, tells Fast Company. “And we provide more than just capital–we provide management support.”
GADC was started by South Africa entrepreneur Bruce Robertson, who two years ago was requested by the Ugandan government to take over a cotton ginnery in order to kick-start a cotton-producing ecosystem. Northern Uganda had a long-standing civil war and the land was virtually untouched, says Mohandas. “This is a geography which has been growing cotton for several centuries. The soil is in good condition for cotton.”
At that point Robertson started giving farmers in the area increased access to markets and he introduced organic growing. And as with any venture capitalist, an investment is just as much about the entrepreneur behind the idea as the idea itself and Acumen Fund, too, sees this as an investment in both Robertson and GADC.
“Acumen Fund and Root Capital’s investments will help GADC buy cotton from local farmers, sell the lint to international buyers and provide access to larger markets,” says Robertson, GADC’s CEO. “All of these components are key to achieving a seamless value chain, maximizing return to the farmers and leading Northern Uganda on its road to recovery.”