ACUMEN is a global organisation that is changing the way the world tackles poverty. The organisation is active worldwide and effects change with the help of a strong community of changemakers. Founded 19 years ago by Jacqueline Novogratz, the first investments made by ACUMEN funded social entrepreneurs in India, Pakistan, and Eastern and Western Africa. Investment into Latin America began 5 years ago.
Santiago Alvarez, Partner and Investment Director at Acumen LatAm Capital Partners, an affiliate of ACUMEN Latin America, told us that the first investments made in 2015 were already yielding results, visible both in terms of impact as well as in terms of growth.
The number of social businesses that ACUMEN invests in is increasing, a reflection of the fact that social entrepreneurship in the region is gaining momentum.
Several factors are facilitating this positive trend experienced in the region. One is the peace agreement signed in Colombia, which caused a multiplier effect in the Columbian impact ecosystem, where an ever increasing number of stakeholders is joining the movement and collaborating for economic development.
Two economies in Latin America have ecosystems that are highly developed, one is Mexico and the other is Brazil. These two countries are the largest in the region and their economies are the most developed. Next are Chile and Argentina, whose economies are more developed than the others, a fact which is reflected in social entrepreneurship initiatives. Coming in last are the Andean countries and Central America, the regions in which ACUMEN is most active.
Why specifically these regions? These regions face the greatest challenges with regard to closing the gaps in inequality and in the development of the social entrepreneurship ecosystem.
ACUMEN supports social entrepreneurs dedicated to closing inequality gaps. Not only does the organisation invest in early growth stage and high impact companies through its early stage investment programme, but it also invests in growing companies through Acumen LatAm Capital Partners. This affiliate of ACUMEN focuses on supporting more mature companies wanting to scale.
ACUMEN seeks to support businesses where the business model does not contradict the aim of creating an impact. After all, higher growth results in a higher impact.
Investments are made in three strategic sectors: agro-industry, education and sustainable energy.
The agro-industry currently makes up 90% of ACUMEN’s portfolio. Most of the companies in this portfolio work with small producers and generate value throughout the supply chain. They provide technical assistance, price stability and establish long-term relationships with small producers. ACUMEN supports and fosters social innovation in industries such as cocoa, coffee and avocados and is always interested in exploring opportunities in further industries.
In education, they focus on models that support young people with low incomes, helping them to gain access to formal employment.
In Latin America there is a very large gap between what companies need and the skills that people are acquiring in formal education, whether public or private.
New business models are emerging that use technology to reach an incredibly large audience, helping people develop the skills they need to enter the labour market.
Lastly, ACUMEN also supports social companies dedicated to making renewable energy accessible to all, whilst focusing on providing vulnerable communities with clean energy and improving their energy efficiency.
ACUMEN is an organisation that is committed to its values, which is why social entrepreneurs can contact them directly to establish a relationship. Individuals can do this either through social networks or through the ACUMEN website. The organisation does not make use of closed calls for proposals.
If you are a social entrepreneur and express your interest in collaborating with ACUMEN Latin America, you will be given the opportunity to talk to a member of their team. Work will begin once ACUMEN has analysed how your social business aligns with its areas of activity and the level of development of your business and impact models.
For ACUMEN to support a business model, social impact must be at its heart. Social impact as an externality is not enough.
