ImpactAlpha, April 23 – Rodrigo Villar and New Ventures Mexico are waking up private investors to Mexican and Latin American startups tackling social and environmental challenges
“The real innovation that’s going to happen in this region is going to be social,” New Ventures’ Villar told ImpactAlpha’s David Bank at this year’s Foro Latinoamericano de Inversión de Impacto, or FLII. “The needs are huge so the opportunities, as well, are big.”
New Ventures has helped accelerate more than 800 ventures tackling housing, education, health, financial, environmental and energy challenges in the past 15 years.
For Adobe Capital, competitive returns in Mexico run through social ventures
New Ventures has invested in 10 of them through two quasi-equity funds managed by its in-house venture capital firm, Adobe Capital. Adobe has exited two deals, including Tijuana, Mexico-based home rehab startup Provive earlier this month.
And under Villar’s watch, New Ventures hosts one of the region’s leading impact investing conferences, FLII, now in its ninth year.
“If you really want to convince the private sector to move into this sector,” says Villar, “than you need a proof of concept.”
Filling the gap
New Ventures’ ecosystem approach has helped the firm identify the ventures with the mission, technology, innovation and scaleable businesses models to be allies in solving social and environmental challenges in Mexico and Latin America. It’s also allowed the firm to under the unique financing needs of such ventures.
Adobe Capital, IGNIA exit Mexican home rehab startup Provive
Adobe structured investments in its first two funds as quasi-equity convertible loans with pre-defined exits. The structure gives firms flexibility in repaying investments as a percentage of revenue and entrepreneurs the ability to maintain ownership. For Adobe, the structure allows it to realize an exit without the need for new investment.
New Ventures’ new tool, Viwala, aims to fill a financing gap for a broader swath of impact ventures. Viwala will make working capital loans of $50,000 to $150,000 and link repayments to revenues. The goal, says Villar, is to be able to finance growing firms with real revenues, but without tech-style exponential growth.
Second wave – and second funds – for Latin America impact fund managers
New Ventures’ mission: Find, support and back the firms driving social and environmental innovation in Mexico and Latin America. Says Villar, “That way we can prove to the private sector that this is feasible.”