Capria takes an innovative approach to adding value to the impact investing ecosystem. One way Capria does this is through Capria Network, a deep trust and high collaboration peer network of emerging market fund managers committed to delivering superior results.
This is the second of a three-part series exploring a few of the ways that Capria Network members CONNECT, COLLABORATE, and CREATE to deliver superior results.
Fund managers across Africa, Latin America, and Asia face similar problems when it comes to finding good companies to invest in. Capria’s collaborative approach helps its network fund managers make wiser investment decisions and build excellence at par with global standards. Network members often are like a team that works together in collaborating, creating and integrating learnings for improved decisions and ecosystem contribution. The high-trust environment helps fund managers collectively solve common challenges and learn from each experience.
A layered collaborative approach around the below-mentioned four aspects helps deliver superior results and in some cases, almost up to a 100% IRR.
1. Leveraging sector and subject-matter experts across the network
When idacapital from Turkey sees an interesting edtech deal, hey run it by Prismapar, Terra, Pomona and a few others in the network. The Capria Network shared deals database allows network funds to have insight into the pipelines and portfolios of all Capria Network members. All these experienced fund managers then get together virtually and share their region and deal related insights helping idacapital make a sound decision. This is one of the many outcomes of the bi-weekly deal reviews that Capria network members do. Funds present deals spanning various sectors for deliberation and feedback leading to informed investment decisions. Similarly, many healthcare deals have been discussed between Vakayi, Unitus, Adobe, Pomona and idacapital and fintech deals among Lateral, Performa, Brightmore, Odiseo, and Terra.
Capria’s leadership circles (comprised of subject matter experts) is a driving force helping investors support and grow with each other. For example, idacapital has benefited from Unitus’s market research and understanding of the Indian market as well as the education sector in international markets. Specifically, getting ideas on comparable valuations, risk factors and competition during the GNG and IC process has been useful.
“The Unitus team is almost like a “shadow management team” supporting us during our deal reviews with sector-specific insights.”
– Cem Baytok, Managing Partner, idacapital
Sharing insights on deals is one of the classic examples of the network effect and has helped Capria Network members get a clear and unbiased look at local opportunities with a global lens, thereby increasing their chances of getting investments right.
2. Learning about different investment instruments and strategies
Thanks to Capria’s collective and collaborative approach, fund managers have a constant learning and insight flow on varied investment instruments and strategies used in the networks. For example, Adobe is a leader in Latin America in the use of mezzanine financing and has had discussions with Unitus Ventures in India and Vakayi in Zimbabwe in helping them understand it better, sharing the specific terms and how to structure such deals.
Similarly, Pomona in Guatemala has shared about revenue-based financing with Edge Growth in South Africa. These exchanges were mainly possible through Capria’s Virtual Workshops and Co-Create sessions.
“While Unitus is primarily focused on Healthcare, Education and FinTech sectors right now, access to expertise in other sectors like Agtech or CleanTech is valuable as we could potentially pursue opportunities in newer sectors as well”.
–Radha Kizhanattam, Investment Director, Unitus Ventures
These workshops and sessions provide a platform for fund managers to share their knowledge and expertise for other network members to learn and follow-up with.
3. Sharing pipeline companies and potential co-investment opportunities
Co-investing is one of the common outcomes of being a part of Capria Network. As fund managers look for other investors within their region, they end up giving preferential access to fund managers within the network over others in the region. For example, Adobe thinks of Prismapar first when they are reviewing co-investment opportunities for their portfolio companies with an Edtech focus, or Capital Invent for Fintech and other consumer product companies. Thanks to the deal database available to all network members, the fund managers get an idea about the deals reviewed and also pipelines of other managers in their region and across the globe.
4. Gaining insight and due diligence from fellow investors
In situations where fund managers look to invest in startups that have existing investors within Capria Network, the insights and due diligence conducted by the existing members play a vital role in informing decisions.
For example, one company being considered for investment by Odiseo in Colombia had Nicole Rossell from Terra as a personal investor in their Guatemala operations; Odiseo benefited from her expertise and knowledge of the company. Network funds get access to knowledge and insights on the fit and viability of the deal that they would otherwise not have.
Additionally, the Capria teammakes introductions to potential investee entrepreneurs and portfolio companies. One such instance was an ed-tech company based in Chile, which four of our Latin American funds with a regional focus were interested in. Several months of due diligence followed where Odiseo and Pomona seriously considered investing and got valuable input from other fund managers in the region. Fen, being based out of Chile, met with the entrepreneurs on behalf of Odiseo and Pomona and provided deep analysis, insights, and information on them as local market experts. Prismapar, as an education-focused VC, supplemented with their sectoral expertise and enabled discussions on the business model and expansion/exit opportunities for the company.
While these are within regions, Capria is also supporting fund managers who want to extend to other geographies. The network members benefit from the wider circle of experts who can guide them on making wise decision investments. The experts help with advice, inputs, building a network, insights on go-to-market strategies, customer profiling, etc.
For example, Odiseo gained insight from Pomona during a Capria deal review on a company that was looking to expand into Central America. Pomona’s knowledge of the local industry and other similar companies helped them in the deal due diligence and evaluation.
Overall, Capria is creating a vital link that is missing from the emerging market ecosystem – A network that will be the key growth contributor similar to the support investors receive from each other in Silicon Valley.
All Capria Network fund managers have access to, and contribute to significant shared resources and expertise for a fund set up, fund operations, access to capital, and most importantly, peer learning. This deep collaboration has enabled fund managers to successfully invest USD $259 million in 157 companies and achieve 16 profitable exits to date. By the end of 2019 the collective AUM of the Capria Network will rise to USD $863 million.
Do you want to be a part of the Capria Network? The final application deadline for our 7th Investment Cycle is just two weeks away, apply here NOW!