Targeted support to back local fund managers providing growth capital for fast-growing young businesses
July 09, 2018. Seattle, Washington. Capria, a global investment firm advancing the next generation of impact fund managers in emerging markets, today announced a partnership with the Australian Government’s Department of Foreign Affairs and Trade (DFAT) to expand Capria’s global investment platform into the Southeast Asia region. In concert with DFAT’s Scaling Frontier Innovation Program, Capria will be leveraging its emerging market experience in Africa, Latin America, and India to form deep, long-term partnerships with innovative regional fund managers that specialize in investing in small, fast-growing businesses.
Small, Fast-Growing Business are Core Asia Growth Drivers
Small, fast-growing businesses (SGBs) have an immense impact as the growth drivers of emerging economies in Southeast Asia including Indonesia, Philippines, Vietnam, Myanmar, and other countries. They are vital to innovating development and delivery of affordable essential products and services to underserved low- and middle-income populations. This fosters increased upward mobility and less inequality, and represents an opportunity for excellent financial returns for both local and global investors.
“Historically, many investors are wary of small investment ticket sizes (typically USD 300,000 to USD 3 million) and the subsequent support required for the early-stage businesses,” said Dave Richards, Co-Founder and Managing Partner, Capria.
“With the DFAT partnership, we are expanding our unique model of investing and partnering on a long-term basis with selected Asia fund managers to scale up their investing programs leveraging the capabilities of a global network of similar funds to deliver superior returns and scaled impact.”
Addressing the Challenges Faced by Promising SGBs
SGBs in emerging markets face many challenges scaling up starting with access to sufficient risk capital. They are typically too big for microfinance and informal local investors, and too small or too risky for banks, private equity firms, development finance institutions, and other direct investors. In addition, SGBs need local, capable value-add partners to help them succeed ‒ providing strong professional networks that include access to capital, deep experience in business execution, technical and sector expertise, and much more. Capria partners with highly capable local fund managers to fill this vital role.
“We are excited to partner with Capria to build critical support for growing investment flow to promising early-stage businesses in Southeast Asia,” said Stephanie Kimber, Scaling Frontier Innovation Manager from DFAT’s innovationXchange.
“Capria’s innovative model leverages their experience from Africa and Latin America and uses it to increase access to capital and support for female fund managers, entrepreneurs, workers, and consumers across the region.”
Capria to Partner with 5 Asia Fund Managers by 2019
Over the next 2 years, Capria will partner with and invest in up to five first-time and experienced fund managers in Southeast Asia, each which will be initially investing in 5-10 additional SGBs per year going forward. These local professional early-stage and early-growth investors will be deploying capital via private equity and mezzanine debt structures typically investing under USD 2 million per investment. Capria is considering both single and multi-sector funds targeting innovation sectors including healthcare, education, financial services, logistics, ecommerce, and more.
Capria looks for entrepreneurial investment teams with considerable investing and operating experience willing to get their hands dirty in working with these high-growth companies. Capria expects that these investments will attract USD 100’s of millions over the next few years and USD billions over the next decade as these companies scale-up regionally and globally.
Capria Ventures is a global financial services innovator investing in the “missing middle” finance opportunity for small, growing businesses in high growth emerging markets. Capria manages multiple investment funds and partners with a growing global network of local fund managers, with over USD 260 million under management collectively. Capria Network is the largest global network of funds focused on delivering superior profits to investors along with social and environmental impact at scale in alignment with the UN Sustainable Development Goals. Capria has offices in Seattle, Nairobi, and Bangalore. More at: http://capria.vc and http://unitus.vc
About DFAT’s Scaling Frontier Innovation Program
The Scaling Frontier Innovation (SFI) Program is an initiative of the Australian Government Department of Foreign Affairs and Trade’s (DFAT) innovationXchange supporting social enterprises to scale their development impact in the Asia Pacific region. SFI aims to support innovative businesses in Asia-Pacific to scale their development impact. DFAT believes that businesses delivering social impact are an important pathway to poverty alleviation and sustainable livelihoods. For more information: https://www.scalingfrontierinnovation.org/