Fund to offer long-term financing for SMEs and start-ups serving the Base of the Pyramid (BoP)
The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group, will make a $4 million equity investment in Vox Capital Impact Investing Fund I, a Brazilian venture capital fund that will provide long-term financing and value-added advice to up to 10 small and medium-sized enterprises and up to 12 start-up companies.
The Fund will target companies with profitable business models that offer high-quality goods and services to poor and low-income populations, a segment also known as the Base of the Pyramid (BoP), primarily in the education, health, financial service and housing sectors. Vox Capital Impact Investing Fund will be the first venture capital fund in Brazil focused on the needs of the BoP population and it will be operated by Vox Capital, a firm with relevant experience and a long-term commitment to this segment.
Through the Fund’s investment strategy, Vox Capital aims not only to invest in individual companies but to support the development of an ecosystem of companies that will meet the needs of BoP populations. It will target SMEs that address bottlenecks in the provision of goods and services to the BoP, and that have proven business models with annual revenues in the range of $500,000 to $7.5 million at the time of investment. The fund will also target start-ups with high potential for growth.
With an extensive track record investing in seed and venture capital funds in Brazil and other Latin America and Caribbeancountries, the MIF will add value to the new fund’s managers by providing know-how, facilitating access to a network of practitioners and potential partners, and promoting the use of international best practices, environmental and social standards in the fund’s corporate governance. The MIF’s experience in investing and participating in investment, advisory and technical committees of other BoP funds in the region, such as IGNIA in Mexico and Inversor in Colombia, will be key to the transfer of knowledge and lessons learned, helping this fund shorten its learning curve.
By supporting the first BoP fund in Brazil, the MIF expects to raise awareness about the need to invest in sustainable companies that can provide profitability while focusing on the BoP population as clients, consumers, and service providers.