This article was first published on AllAfrica. Read the original post here.
Johannesburg — Visit Prosper Africa to access U.S. Government trade and investment support and browse the Virtual Deal Room with curated investment opportunities, including companies like LifeBank.
Eva Yazhari, Co-Founder and CEO of Beyond Capital Fund is all about impact investing. Inspired by her family history – specifically her grandfather, a medical doctor who left the U.S. in the 1960s with five children to Tanzania where he later set up a clinic – Yazhari says that was her biggest inspiration to think differently about the world and about her own skills as an investor.
“We are an impact venture fund. We fund in health care, financial inclusion, and agriculture in East Africa, as well as in India. And we blend what we call two of the top four emerging markets destinations globally, of which East Africa is one of them, into a portfolio for our investors. We like to say that we invest in need-to-have led by conscious leaders, leaders who are thinking about all stakeholders in the work that they do,” Yazhari says.
Finding just the right companies to invest in in developing countries can prove difficult, especially when most companies lack resources and funds to put themselves out there for investors to find them, Yazhari says. And that’s why Beyond Capital has benefited from using US government initiative Prosper Africa‘s Deal Room, to source investments and increase trade and investment between African nations and the United States.
The Deal Room allows investors, buyers or interested parties to register and review curated deals worth between U.S.$1-million and U.S.$100-million, and has enabled organisations like Beyond Capital Ventures to find the right startups to invest in.
Yazhari has 16 years of experience in investing for social impact, Beyond Capital Ventures, a sister organisation to Beyond Capital Fund, prides itself in investing in early-stage businesses primarily in healthcare, financial services, and agriculture. The organisation invests in social enterprises serving impoverished communities throughout India and East African countries including DR Congo, Kenya, Tanzania, Uganda and Rwanda. The reason her organisation chose to invest in India and East Africa is because they are two of the top four emerging markets destinations globally.
Yazhari says her organisation has always been looking to generate returns alongside impact and so these sectors are where they have seen the most vibrant opportunities with promise of impact but also legitimate and viable financial return potential.
“We’ve had over a decade of experience in these markets, and really understanding what we like and what we don’t like to invest in. We view these three sectors as being the kind of critical need-to-have for individuals that are at low income. And there’s research around the fact that lower income individuals below U.S.$15 a day do have a budget to spend on health care, banking, and agriculture tools that will improve their livelihoods. And they are sectors that are well developed enough in our markets that they can also be for profit investment opportunities,” she says.
The businesses they invest in need more than just capital, hence Beyond Capital. The company provides their investments with support that spans everything from executive coaching, providing access to executive coaching, or money for executive coaching, all the way through support that could be an interim COO on the ground, financial modeling assistance and just being a sounding board on a regular basis.
Investing in healthcare can have a significant economic payoff for low income countries and can impact communities positively. And as Covid-19 has taught many governments, improving healthcare services and improving technology in the healthcare system can help find solutions faster. Yazhari says one of the companies that her organisation has invested in that she is most proud of is Viebeg Technologies. Viebeg operates in Kenya, Burundi and the Democratic Republic of the Congo, serving over 500 customers since the company’s launch.
“This business is basically just creating a more efficient way and tech-enabled way for hospitals, health clinics, and health care providers to get access to medical supplies. But they’re cutting out these layers of middle people that often make a dental chair, as expensive as it would be in the U.S. in somewhere like Kinshasa. And that’s why I love this company, because it’s really thinking through access distribution, how healthcare providers can get their hands on the best products that other health care providers have around the world. And what that translates to is better patient outcomes, better patient savings.”
Another organisation Beyond Capital Ventures has invested in that she is proud of is Kasha, a Rwanda/Kenya female techhnology (Femtech) or e-commerce platform which works to improve women’s access to health, hygiene and self-care product like menstrual care products, contraceptives, pharmaceuticals and a range of beauty products which are delivered to customers confidentially.
“I’m so excited about all of our companies. But one is older, meaning more mature, and we’ve been invested for longer. Kasha is Africa’s leading femtech business its a company based out of Kenya and Rwanda, which provides confidential de-stigmatized access to women’s health for women of all income levels. That’s not just contraceptives and feminine sanitation. It’s also then soaps, lotions and candles and all the fun stuff that women want as well. So its has really been creative about the company’s branding to be able to meet that market. The company though also employs a largely female workforce, to sell these products. So it has the ability to think beyond just shareholders and customers and really thinking about their employees. And they have really innovated around how to work with the other stakeholders like the government or the community in order to continue to destigmatize women’s health to make women’s health more of a topic that I think is more recognized as real tangible and needs to be addressed,” she says.
The Covid-19 pandemic has shocked many healthcare systems and economies, and crippled developing economies. Businesses have had to change and innovate in how they do business. Yazhari says she thinks most companies in the continent are “incredible” and resilient with an ability to navigate changing environment.
“But where we really helped them as they get through restructuring, because a couple of companies, you know, had debt or other other kind of types of funding that needed to be restructured or kind of other things that they needed to work on that were related to maybe not having the same level of revenue in their business or not being able to raise the same amount of capital that they had expected pre-pandemic. And so we put together a restructuring playbook for our portfolio companies to provide them with access to the best techniques of the restructuring industry globally and to employ them at their business.”
Regarding which strategy her organisation has used to reach a wider audience regarding impact investing, Yazhari says: “We like to speak to a wider audience, we host women and impact gatherings, which we do for the continents timezone. As well as some European participants. I was a speaker and put together a panel on bridging the gap between founders and investors last year. I’m always happy to be a resource on a speaker around what’s working in our portfolio, and what’s not. We are also working on innovating more systematic ways of measuring gender impact in our portfolio. Last thing, one way we’re also push pushing the envelope is we are giving away the profit share in our fund to every founder in our portfolio, and we are making them owners and we are making them a part of a community to know that we’re all in this together.”
The biggest barrier to seed-stage investment in African nations that her organisation invests in has been access to the right capital.
“I would say specifically in Africa, in India, there’s a lot more velocity of capital, there’s a lot more early stage funding available. And I would say that access to the right capital. I don’t believe that a company should be taking in concessionary funding early on, I think it distorts the marketplace and perpetuates the problem of thinking of Africa as a place that can only thrive with philanthropy. That is something I’m really passionate about changing viewpoints on because we have incredible businesses in our portfolio, that are doing really well financially and having a very strong impact. Our first fun portfolio has to exit at top quartile venture returns, but we’re also reaching 20 million people, including 14 million women.
“And so by rejecting the fact that that is possible, and you know, saying, Oh, I’ll do below market rates, or yeah, I’ll put money into that and form of a grant, I think help really distorts the market and makes it even harder for founders on the continent to find capital. That being said, things are changing really rapidly. So I have a lot of hope. Because I do see a lot more money flowing into the deals that we’re doing. They are becoming more competitive, valuations are higher. And overall, I think that that will translate to a frankly, a healthier investment environment. I think concessionary investing is really unhealthy. So that is one of the biggest barriers is having capital that meets the market. And then the ability for companies to have a true sounding board, or the right advisors and the right talent to be able to grow and scale” she says.
“I wrote the book because I wanted everybody to know that they could also be a conscious investor, it doesn’t mean that you have to be a billionaire, it doesn’t mean that you have to have a large investment portfolio, all it means is that you have to be conscious about all your resources, and line them up with your values, whatever they are. And my goals with the book are that it gets into the hands of more readers. And it’s not just a book for Americans to book for anybody. Yes, there are some recommendations around being a U.S. investor, but it is truly for anybody who wants to think differently about their money, because money is just one form of wealth, happiness, your networks, your voice, your consumer choices, your vote, whatever you are privileged to have in your life is a form of wealth, and we don’t recognize that enough is humanity, and that’s, that’s why we go beyond just money as an investor, because to us, the return on the in the relationship with the founders is as important as the financial and social return that we’re getting. So my goal is that everybody picks up the good your money can do. And let me know their feedback, because I am here for the readers. And I would love to hear what’s resonating with them,”she says.
Yazhari also co-hosts the Beyond Capital Podcast that features conversations from leaders that believe in profit with purpose.
Yazhari is not just a seasoned investor and entrepreneur but an author too, her book titled The Good Your Money Can Do walks through how to become a conscious investor.