IMP Matrix Rating: C6
What: EcoEnterprises III is a fund that invests in businesses that have positive conservation outcomes in Latin America. It specifically targets our three impact focus areas of gender, climate change mitigation, and sustainable supply chains, as well as decent work and economic growth, and the support of life on land and life below water. It provides tailored capital in the form of debt, revenue share agreements, and equity with put options, in order to support growing companies yet optimize for liquidity to investors. Investee companies operate in the sustainable agri- and aqua-culture, ecotourism, and the food and beverage sectors.
Who: The fund’s primary stakeholder is the environment, whereby each business ensures the conservation and enhancement of habitats where they operate, e.g. through regenerative agriculture. The fund, which is managed and predominantly staffed by women, also has strong social impacts by investing in businesses that provide employment for local populations as well as benefitting communities directly (e.g. in the case of Sistema Bio, by generating clean electricity for off-grid villages).
How Much Impact: The fund implements strong environmental and social management system due diligence, monitoring, and risk management for each of its investments. This results in many investee companies achieving Rainforest Alliance, Fairtrade, and other recognized certifications. Cumulative reach from the entire EcoEnterprises family of funds since their inception in 2000 include: nearly 17 million acres protected or sustainably managed, 1,531 communities involved, 46,168 suppliers supported, and 278,475 local people benefitted.
Our Contribution: The fund operates in a region and in sectors chronically affected by capital under-supply, where investors such as EcoEnterprises are needed when banks and mainstream investors either cannot lend or would do so on terms that are not flexible enough or fitting both the business and impact goals of such companies. We provided capital to EcoEnterprises for their third fund, to continue to support their impact.
Impact Risk: The impact generated by these companies lies mostly in execution, rather than necessarily on inventing new ultra-scalable technologies, like in VC. Therefore, the main impact risk of this investment is that the learnings from the leading companies EcoEnteprises supports are not absorbed by the wider ecosystem and/or do not show proofs of concept for governments to implement pro-conservation regulations.
Sample Investment: Sistema Bio, which is a company producing a prefabricated modular biodigester package that includes a full suite of biogas appliances and connections.