NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Deetken Impact has launched Deetken Impact Alternative Finance (“DIAF”) Fund IV, LP (the “Fund”) as a result of the synergistic partnership of Deetken Impact and Adobe Capital. The Fund offers flexible alternatives to traditional debt or equity instruments by designing founder-friendly financing solutions that aim to support long-term growth. The Fund will invest in profitable, growth-stage enterprises with proven impact models and a commitment to gender equality throughout Spanish-speaking Latin America and the Caribbean.

The Fund is seeking aggregate equity commitments totalling US$100 million to invest in a geographically-diversified portfolio of impact enterprises via tailored debt structures ranging from Revenue-Based Financing (“RBF”) to subordinated loans with or without equity kickers. Given Deetken Impact’s pioneering role as a gender lens investor, a robust gender lens investing framework will be applied to assess and advance each portfolio company’s gender business practices.

“We are very excited about the launch of DIAF Fund IV to continue providing tailored financing solutions to promising impact enterprises across Latin America & the Caribbean. This region has tremendous potential, yet has struggled historically in terms of access to financing, a gap we are especially well positioned to address having managed 3 impact funds to date totalling US$85 million in AUM that have completed 42 investments in 14 countries.”

Erik Wallsten, Managing Partner, Deetken Impact

Latin America & the Caribbean is the region hardest-hit by the global pandemic, with more than 20 million people pushed into poverty*. Women have been affected disproportionately, and as a result, the pandemic is estimated to have set back gender parity by more than three decades, up from 100 years pre-pandemic to 136 today**. Additionally, nearly one third of SMEs in the region are financially constrained, consistently citing a lack of access to finance as a key barrier to growth***.

We believe that many of the region’s prevailing social and environmental challenges can be addressed through profitable, market-based solutions. The Fund aims to facilitate this by providing financing to impact enterprises that are poised for growth and meaningfully contribute to the Sustainable Development Goals (“SDGs”) in the sectors of education, healthcare, affordable housing, financial inclusion, circular economy and responsible consumption.

As Deetken Impact’s fourth debt impact fund, the Fund draws on a strong track record and deep regional network. Previously, DIAF launched Mexico’s first triple bottom line impact investment fund, pioneering the use of revenue-based financing in the region, as well as the first gender-lens investing fund dedicated to Latin America & the Caribbean to empower women and advance gender equality.

Photo courtesy of Maria Fleischmann / World Bank.