SAN FRANCISCO, CA – Today, at the Social Capital Markets conference (SOCAP), the U.S. Agency for International Development (USAID) announced three public-private partnerships to catalyze private investment towards early-stage enterprises and foster financially sustainable enterprise incubation in developing countries. The U.S. Global Development Lab (Lab) is partnering with Village Capital, Shell Foundation, and Unitus Seed Fund to drastically scale-up these efforts and combined will leverage nearly $40 million with a $6.3 million investment made by the Lab.
These three Global Development Alliances are the first to be formed out of the Partnering to Accelerate Entrepreneurship (PACE) Initiative from the Lab, with the goal of spurring innovations that accelerate the creation of promising, high growth, and financially sustainable entrepreneurial ventures across the developing world. Through partnering with incubators, accelerators, and those who work with early-stage enterprises, PACE aims to identify innovations that help entrepreneurs bridge the “Pioneer Gap” that exists between high-risk, promising early stage enterprises and ranks of impact investors looking for investable enterprises – thus unlocking the potential of thousands of promising enterprises around the world.
"Our Agency is embracing a new model of development—one grounded in a focus on innovation, local leadership, public-private partnerships to accelerate the progress in challenging places," said USAID Administrator Rajiv Shah. "By partnering with proven organizations like Village Capital, Shell Foundation, and Unitus Seed Fund, we will source, test, and scale game-changing solutions that unlock opportunity for the world's most vulnerable people."
Village Capital: In collaboration with the Sorenson Impact Fund and Chilton Capital, the Lab is supporting an impact fund that will allow Village Capital to drastically scale its entrepreneurship programming in the agriculture, education, energy, financial inclusion, and health sectors. Since 2009, Village Capital has supported 400 enterprises in 27 business assistance programs in the US, East Africa, India, China, Brazil, and Europe. Village Capital’s signature innovation in these programs is the peer-selection process—a democratic approach that empowers entrepreneurs to participate in allocating capital to the most promising ventures addressing marginalized populations and global environmental challenges. To date, Village Capital has facilitated $2 million in investments in 41 peer-selected companies. These companies have raised nearly $40 million in follow-on capital, have served nearly 600,000 customers and beneficiaries, and created over 5,500 jobs.
Shell Foundation: Together with Shell Foundation, the Lab is supporting the development of three complementary models to accelerate the innovation of affordable energy solutions for low-income consumers. The new incubation vehicles will help energy innovators test game-changing technology, prove the viability of new business models and unlock further social investment to support their scale-up. Shell Foundation is an independent charity that creates and scales new solutions to global development challenges linked to energy and mobility by identifying underlying market failures and working with entrepreneurial pioneers to solve them. In providing patient grant funding, business support and market links, and creating specialist intermediaries to remove barriers to scale, Shell Foundation has co-created several partners who are now delivering large-scale impact across Africa, Asia and Latin America.
Unitus Seed Fund: the Lab is supporting Unitus Seed Fund in its efforts to build a more robust entrepreneurship ecosystem in South Asia. Support from the Lab will allow Unitus to connect with quality impact entrepreneurs beyond major Indian urban centers, improve the quality of start-up business incubators, and strengthen the advisory and support services to help grow early-stage impact businesses. Unitus seeks to create sustainable and scalable opportunities for large, underserved populations by enabling exceptional entrepreneurs to accelerate their business’s growth. Unitus’ portfolio companies enhance economic self-reliance, improve health and education, optimize agriculture, and provide basic necessities. Unitus has secured commitments exceeding $20 million and has already made 13 investments to date, making it the most active seed-stage impact investor in India.
Since 2001, USAID has built over 1,500 public-private partnerships involving more than 3,500 unique partner organizations, with an estimated value of more than $20 billion in public and private funds. Across this portfolio, USAID has leveraged nearly $3 in partner contributions for every $1 of USAID funding.