IGNIA Completes Second Closing, Bringing Fund I to $34M

Wednesday, November 26, 2008

GARZA GARCIA, Mexico, November 25, 2008– IGNIA Fund I, L.P., Latin America’s first social venture fund, announced today it has reached a total of US$34 million in equity commitments by completing its second closing. Investors include the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), a US family foundation, and European and Latin American individuals. This round of US$13.6 million builds on IGNIA’s initial closing of $20.6 million announced in early June. IGNIA projects to achieve its target of $50 to $75 million in equity through subsequent closings into the early part of next year. Together with the $25 million in debt financing IGNIA closed on with the IDB, IGNIA will invest a combined total of $75 – $100 million in innovative businesses that serve the Base of the Pyramid (BoP) in Latin America.

“This US$13.6 million capital closing and the recently announced US$25 million debt financing have both been closed after the start of the financial crisis,” said Alvaro Rodriguez Arregui, IGNIA co-founder and Managing Partner. “We deeply appreciate the trust of our investors at this sensitive time, and it is a clear indication of how strong they deem the IGNIA business model, the team we have assembled and our theory of change.”

“Partnering with the MIF will bring tremendous value to IGNIA,” said Michael Chu, co-founder and Managing Director of IGNIA. “We will benefit from the substantial experience the MIF has built in pioneering equity investing in the region.”

“By supporting IGNIA, MIF is not only supporting the creation of a new venture fund dedicated to the base of the pyramid segment, but is also helping create a new segment within the venture capital industry that will focus on fighting poverty, combining the lessons learned from microfinance with the financial tools of venture capital,” said MIF team leader Susana Garcia-Robles. “The demonstration effect of this fund could lead the way for many more similar initiatives in the region.”

MIF has a mandate for innovation and aims to accelerate development of the private sector in Latin America. Over the past twelve years, MIF has approved 56 seed and venture capital funds, representing over US$200 million in commitments in over a dozen countries.

“Alvaro Rodriguez Arregui and Michael Chu were instrumental in making microfinance successful in Latin America and also have a unique combination of private equity, executive management and BoP experience in the region,” said Garcia-Robles. “They can make the venture capital approach to tackling poverty a success by investing in and scaling up businesses that serve the BoP.”

IGNIA has already begun execution by completing two pioneering investments, one in health care and the second in affordable housing. IGNIA made a $3 million commitment to Primedic, which delivers quality health care to the urban BoP, and $2 million investment in Jardines de Grijalva, an affordable housing development in Chiapas, Mexico (made through its real estate subsidiary).

IGNIA Fund I, L.P. is a social venture capital fund that invests in high growth businesses in Mexico and other regions of Latin America. By providing effective responses to the enormously underserved needs of the low income population, both as consumers as well as active participants in productive value chains, IGNIA empowers entrepreneurship and generates social impact while creating attractive financial returns for its investors. More information is available at: www.ignia.com.mx

Source: Venture Capital News (link opens in a new window)