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Latin America’s impact investors lead the way at the Foro Latinoamericano de Inversión de Impacto



Mérida, Feb. 20 – More than 600 impact investing doers and shapers are convening in Mérida, Mexico this week for the Foro Latinoamericano de Inversión de Impacto, the biggest impact investing gathering in Latin America, now in its 10th year. 

Conference host New Ventures has built “the FLII” into a global gateway to impact investing in Mexico, Central and South America. Among this year’s hot topics: solutions for refugees and migrants, making blended finance work and gender-lens investing.

“Now is the time for Latin America to lead,” said John Kluge of Refugee Investment Network from the stage at Hacienda San Pedro Ochil, the backdrop for the forum’s opening evening. 

ImpactAlpha’s eyes and ears at FLII “X” belong to a dozen business students from the Kellogg School of Management at Northwestern University. Gabriel Meizner, Isabella Artiles, Dylan Sun and other correspondents fanned out to panels and plenaries and gathered intelligence from the FLII faithful. 

Business students from the Kellogg School of Management at Northwestern University.

Social and financial innovations that flowed through the FLII have spread to other regions. Revenue-based financing structures, for example, now a hot topic in VC circles in the U.S., have long been deployed by impact fund managers in Brazil, Guatemala and Mexico (see, “Flexible financing gives venture capital a run for the money in Latin America). 

Flexible financing gives venture capital a run for the money in Latin America

 

Impact-linked financial incentives have been piloted and tested with social enterprises in Mexico, Honduras and Peru (see, “Impact-linked financial rewards help high-impact companies attract growth capital). 

In his keynote, Acumen’s Alberto Gómez-Obregón reminded delegates to be disruptive, center users in designing solutions, develop partnerships and redefine investment success, tweeted Innovare’s Adrian DeLeón. “I wish these types of speakers were the norm in the U.S.!”

Some highlights from Mérida:

Investing in women. “When you help a woman you transform an entire family,” said La Cana’s Daniela Ancira. But small businesses worldwide struggle to find the capital they need and women-run businesses face even steeper challenges. Viwala, launched by New Ventures, offers revenue-based financing to fill the capital gap for “steady growth” companies, rather than high-growth ventures (see, New Ventures is accelerating impact entrepreneurs in Mexico and Latin America). That includes the 30% of small businesses that are women-owned. Pro Mujer targets women at the base of the economic pyramid and aims to “graduate” women to new levels of financing. “We’ve had to create financial instruments that could meet every woman’s specific needs, whether she’s running a business based on need or opportunity,” said Pro Mujer’s Carmen Correa. – Isabella Artiles

Blend and catalyze. Foundations have an opportunity to “grease the wheels” to catalyze commercial capital into nascent sectors, like conservation finance. But even with subsidies, investors are not going to ignore traditional risks and returns, advised Ana López of Conservation International. “We are fine to subsidize other investors,” said Rippleworks’ Ayesha Wagle. “But the business model must work.” – Dylan Sun

Impact-linked financial rewards help high-impact companies attract growth capital

Entrepreneur’s insights. Raising money is the most commonly cited challenge for young startups. “If there’s no match with the investors, don’t waste your time,” advises Suyo’s Matthew Alexander. The company helps low-income families secure property titles and rights to their land. Alexander’s playbook: start early, get local buy-in and fail fast when talking to investors. “Establish contact with investors as early as possible. They want to see your trajectory,” he said. Local angel investors who “really understand your problem can act as a reference and help you build credibility.” – Isabella Artiles

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