Scott Anderson

Weekly Roundup – Lucky 2013? : The new year brings hope for seed funds

For the impact investing community, it sure looks like 2013 has started with a bang. But 2012 certainly didn’t end with a whimper either.

The bang was heard on Thursday with an announcement from Unitus Seed Fund (USF), which raised investments of more than $8 million for early stage BoP startups. In a May Q&A on NextBillion, Dave Richards, the fund’s managing director, outlined USF’s high hopes. Richards explained the fund’s approach and its focus on the enterprises working in the core areas of education, skill development, small farm productivity and affordable health care. And although this week’s announcement is not necessarily a surprise given the ambitions Richards voiced, it’s welcome news and perhaps validation of its model. (Legendary Silicon Valley investor Vinod Khosla is among USF’s investors as well). In addition to its current portfolio of four investments, USF said it plans to make 10 new investments in 2013, and 10-12 each year going forward.

Will 2013 be a year for seed funds? Mohan Pai – a founder of Infosys and a founding investor in the Unitus fund – thinks so.

“I expect to see more seed funds, and their slightly earlier cousins, short-term accelerators, and even longer new style incubators emerge domestically and all around the world,” he told the folks over at the SOCAP Blog in a post this week. “I predict accelerator launches and expansions will explode this year, and that seed funding will expand.”

Impact investors seem to have reason to celebrate 2012, at least the second half of it. In December, the Grassroots Business Fund announced it had closed a $47 million fund with support from the Overseas Private Investment Corporation, the German Development Bank, the Netherlands Development Finance Company and more than two dozen additional governments, foundations and private investors. GBF raised another $12 million from donors to support its non-profit division, which provides business support services to investee companies, such as financial and strategic planning, HR management, corporate governance and supply chain management.

As Anne Field, Forbes contributor noted in a post this week, the bellwether Investors’ Circle, the “grandaddy of impact investing, has become a lot more sprightly of late.

“The 20-year-old network for impact investing minded angels, VCs, foundations and family offices, says social entrepreneurs raised about $10 million through the group’s pitch forums in 2012. That’s up from $2 million to $3 million in 2008-2009.”

Just before the holiday break, I received an interesting status report from Bamboo Finance, which since 2007 has raised $250 million, and is now 46 investments in 25 emerging market countries. Although it not necessarily be defined as an impact investing, USAID’s

Exciting times to be sure. But there’s a lot of expectation as well. Lest we forget, the impact investment market study by JP Morgan and the Global Impact Investing Network (GIIN) from late 2011, projected some $4 billion planned for investment for social enterprises in 2012.

Still, if the end of 2012 and the beginning of 2013 are signals, we may be in for an interesting year.

In case you missed it … This week on NextBillion

There is a Fortune at the BoP: So why aren’t large corporations capturing it? By Ezequiel Reficco

All About India: A Health Care Market in Transition (Part 3) By James Militzer WDI

400 Million Reasons for Impact Investing in China : A first-of-its-kind study dispels misperceptions and reveals potential By Tao Zhang

All About India : A Health Care Market in Transition (Part 4) By Jeevan Kumar and Priya Nadkarni

Unique Opportunity for Social Entrepreneurs with Scalable Ideas: GSBI seeking health and off-grid energy applicants for 2013 By Al HammondAshoka

A Record-Breaking Year for Mobilizing Private Capital for Development By Ben Hubbard

impact investing, venture capital