Odiseo is an early-stage, Colombia-based impact fund targeting high-growth and committed entrepreneurs leading scalable, innovative and impactful businesses. Odiseo provides acceleration, co-investment opportunities and a formal scale up process, supporting companies in their expansion strategies.
In an interview below with Harold Calderon Meza, Managing Director, he highlights Odiseo’s investment philosophy and goals, the larger impact investing sector in Latin America, and how Capria is helping accelerate their business.
1. What is the overall fund size? How do you plan to allocate your investments? What is the impact you are aiming to create on Colombia’s low-income population?
Our current fund size is USD $20 million and we are expecting our first close early 2018. Our approach to investment is slightly different; we are aiming to engage with approximately 100 companies through our proprietary acceleration process. We will then invest in the best candidates from the three month acceleration process. Of the best 20-25 candidates, we will invest ~USD $200,000 in first rounds and up to USD $1 million in 8 of them in follow-on rounds. We are sector agnostic, with our primary selection criteria being innovative, technology-driven business models which will generate financial returns and positive impact within low-income communities in Colombia.
Over the next five-year horizon, we will impact at least a million lives through products and/or services of our portfolio companies and generate at least 4, 000 jobs.
2. What are the current impact investing trends in Colombia?
In Colombia, impact investing is often confused with philanthropy. It’s only recently that Colombia has fund managers investing in entrepreneurs who generate not only solid financial returns but also a significant positive impact. As a result, there are new impact funds being created in Colombia, including Odiseo, a fund focused on Colombian entrepreneurs building profitable, scalable and impactful companies.
Though Colombia’s impact investing ecosystem is still in early stages, the sector is growing. According to ANDE’s ‘The Impact Investing Landscape in Latin America’, between 2014-15, investors reported 16 deals with the average deal size around USD $2 million. Investors also reported seven exits in the same time period. The primary target sectors for Colombian impact investors (~80 per cent) are financial inclusion and agriculture.
3. How hard is access to finance in Colombia? What are the key barriers and how is Odiseo addressing these?
Although entrepreneurship is in vogue in Colombia, it’s only in the last 7-8 years that public and private sector actors have begun paying attention. For example, public institutions, such as Innpulsa and Ruta N, that accelerate entrepreneurship were created in the last 5-7 years. During these years, the focus has been on training entrepreneurs and developing angel investors and venture capitalists. Currently there are only nine formal venture capital funds in Colombia of which only four of them are actively investing. The result is a massive funding gap (there are only two angel groups and five registered VCs in the entire country), which Odiseo is solving by providing capital, best practices, governance and strategic support to local entrepreneurs.
4. How has your overall experience been with Capria?
The overall experience has been great. Three aspects particularly stood out for us –
- The Fund Managers Forum gave us exposure to global investors. Prior to this, we worked with Capria significantly to craft clear messaging and value propositions. The result was a successful pitch which has garnered the attention of foundations, development banks and multilateral organizations around the world.
- Among the many tailor-made modules, we deeply benefitted from the ‘Fee Structuring and Negotiating with LPs‘ module. We realized that we were charging a lower few compared to similar impact funds globally. We learned best practices in structuring and calculating management fees that provided us with a strong argument to further discuss with potential LPs, in both local and international markets.
- We now have access to a global network which provides the best practices, support, experiences and knowledge regarding sourcing, assessment, investment, portfolio management and exits that will make Odiseo a world class investment firm.