The female co-founded impact firm launched as a peer-to-peer lending platform in 2018 to back local and female-led early-stage businesses providing renewable energy solutions in Africa. Charm raised $6.3 million in the first close of its blended finance fund, Hummingbird One. Oikocredit, Dutch Good Growth Fund’s Seed Capital and Business Development, the IKEA Foundation and the Good Energies Foundation participated in the round.
“The vehicle is designed around repeat financing and ongoing engagement, so companies can access continuity of capital as they grow rather than relying on episodic fundraising,” Charm’s Gavriel Landau told ImpactAlpha. “Outcomes are increasingly shaped by how capital is structured.”
The fund will provide loans from $50,000 to $500,000 to companies mainly in Kenya, Uganda, Nigeria and Zambia. It made its first investment in Kenya-based Megawatt Energies, a distributor of renewable energy equipment.
Peer-to-peer
London-based Charm wanted to capitalize on the shift towards sustainable consumption, offering individuals a larger platform to support clean energy adoption in developing markets. Charm raised £243,060 ($322,000) in 2020 from over 500 investors via UK-based crowdfunding platform, Crowdcube. Since then, Charm has raised £700,000 ($926,000) in philanthropic capital and deployed $5.4 million with 40 loans in eight African markets.
“We chose to concentrate on building the underwriting, portfolio management and capital structuring capabilities needed to operate at an institutional level, rather than continuing to expand the peer-to-peer model itself,” Landau said.
Charm’s portfolio includes Winock, which provides solar financing with partner institutions for Nigerian households and businesses, and Havenhill Synergy, a mini-grid developer based in Nigeria.
Energy bond
In 2022, Charm teamed up with Switzerland-based impact firm iGravity to launch the $12.5 million Charm Impact Bond in 2022, another blended finance initiative to help Charm scale up its debt deployment. The bond would be supported by the non-profit Clasp, with backing from IKEA Foundation, to shield entrepreneurs from currency volatility by locking in exchange rates over the repayment period, with a €200,000 ($231,000) local currency first-loss capital pool.
