On Thursday, we met with Acumen and had the pleasure of deepening our understanding of their model and positioning through a case study of an actual investment in an East African country.
In East Africa (and in general) Acumen positions itself as an investment firm that has the ability to leverage capital for high-risk early-stage investments, as its capital is generated from charitable donations and investment returns, focusing on the agriculture, health and energy sectors.
In this way, it is similar to Kiva- tapping into a charitable giving market that wants to see their charity dollar recycled, and is, in addition to offering cash to invest, is donating philanthropic risk tolerance in the interest of seeing local market development as a result.
Acumen invests where other investors don't, offering debt. equity or blended structures in an effort to make businesses attractive for future and larger investment. Debt exits have been generally successful, equity investments have seen troubled waters in terms of exits and Acumen is sometimes staying I these investments longer. With equity investments, the hope is that one of two things will happen: strategic sale or a commercial capital buy-out. They are considering alternatives to equity particularly for firms that are not able to take out debt, including structures with revenue or EBITDA share.
They are currently piloting a commercial fund of their own as well.
Their investment criteria include:
- ability to reach 1m people
- game changing idea in poverty alleviation
- intention to be financial sustainability
- world-class team
We reviewed their investment Western Seed, discussing the due diligence we would want to do on the company before investing. Western Seed is a major seed producer for specific elevations in Kenya, producing a hybrid seed that can increase yield threefold. To learn more, go to Acumen's website www.Acumen.org .
Kilimo Salama
Kilimo Salama sells micro-insurance for weather for farmers, sold through farmer aggregates, coops, and companies that hire farmers. Using weather stations, they are able to track the weather and base premiums and payouts on current vs historical weather data. They are expanding their model across the continent.
An amazing company that uses the power of weather data, an expert actuarial team, and strategic partnerships to source and distribute livelihood-protecting insurance to clients.
Chamber of Commerce
A brief meeting with staff to share in a Q&A about exports/imports & trade, relations with neighboring countries, and Kenya's vision to become a developed nation by 2030.
We finished the day with dinner at Carnivore, a restaurant that serves as much exotic meat as you can eat. Fortunately the vegetarian meals were great, though you have to be careful as not all items on the veg menu are actually veg.
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