By David Berón
Picture this. You have started a small enterprise to directly connect smallholders in rural Colombia with consumers in the country’s largest cities. Your business model could boost the incomes of farmers, increase the quality of food in urban centers, and make a case for affordable and readily available organic produce. But you have no resources to develop the idea’s full potential.
Until 2014, this was the case of Siembra Viva, a then emerging e-commerce platform and now successful B Corp based in Antioquia, Colombia that connects rural farmers with consumers in Greater Medellín. Siembra Viva works to eliminate agricultural intermediaries and provide locally produced, chemical-free vegetables, fruits, and grains at a lower price to consumers.
In 2014, an early-stage, $400,000 investment from the Acumen Fund, one of the world’s leading impact investors and startup accelerators, allowed Siembra Viva to overcome its initial resource hurdle, realize its vision, and scale up its social impact. The company now works with hundreds of farmers in rural Antioquia – providing them with knowhow on organic and regenerative agriculture and access to premium markets and a stable income. Siembra Viva now serves thousands of urban consumers affordable, healthy, and fresh local produce.
With help from Acumen’s investment and its business expertise, Siembra Viva is currently working on a 5-year plan to integrate 370 rural families into its farming network, provide smallholders with top-notch technical advice on the regenerative farming of high-value crops, and analyze and improve every step of the business’s agricultural supply chain. According to Siembra Viva, these Acumen-backed combined efforts should increase farmers’ incomes by 160% and ensure the sustainability of their business model.
Though an exemplary story of triple-bottom-line success, the case of Siembra Viva is not unique; and neither is the work of the Acumen Fund. What is distinctive about this story is the relationship between Siembra Viva and Acumen, between an early-stage social enterprise and a globally renowned accelerator – a story about the far-reaching impact of their relationship.
Acumen is one of a growing set of institutions that combines high-intensity training, mentoring, and finance to help businesses that have a working enterprise scale it up rapidly. In the case of Acumen, seed capital and patient debt or equity investments take a more important role in their strategy than pre-investment training or continuous mentoring. For other accelerators, mentoring is crucial while direct investment is not.
Socially minded accelerators like Acumen, though focused on developmental goals, are not charities; and while they seek financial sustainability in their investees, are not like conventional private equity firms that also invest in early-stage enterprises – there are both for-profit and non-profit accelerators, and for some, social impact is as important as economic returns. And unlike incubators that would come to mind at an earlier stage in an entrepreneur’s agenda, accelerators support and scale-up promising enterprises that are already beyond the “idea” phase.
Like Acumen, there are several accelerators around the world that, following their own missions and strategies, are channeling financial and technical resources into startups and non-profit organizations in the likes of Siembra Viva that are making value chains more transparent, trade fairer, and consumer products better for society and less harmful to the environment.
Though tech continues to dominate the market, there are all kinds of accelerators focused on other sectors. Here are five that work with the sustainable farm and forest enterprises near and dear to Canopy Bridge:
– Acumen Fund: Founded in 2001 with support from the Rockefeller Foundation, Cisco Systems Foundation, and three philanthropic individuals, the fund now has offices in five countries in three continents. Working on six focus areas, Acumen has invested more than $100 million in 92 companies around the world – promoting indigenous beekeeping in India, providing market access to smallholders in Uganda, adding value to Rwandan coffee, and connecting farmers in West Africa through mobile platforms. The Acumen Fund receives charitable donations, invests long-term and early-stage in scalable social enterprises, and recycles its returns to make new investments in Africa, Asia, and Latin America. – Fledge: Based in Seattle, USA, Fledge offers social startups virtual mentorship, in-person training programs, and access to a worldwide support network. In some cases, Fledge directly invests in its “Fledglings” and connects social startups with impact investors in Africa, Latin America, North America, and Europe. Fledge focuses on projects related to women, clean technology, environment, and food and agriculture. Among the “Fledglings” are Agua Piedra Mezcal, a company making artisanal Mezcal in Oaxaca, Mexico, and Cropital, a crowd-funding platform for smallholder farmers in the Philippines. – Agora For Good: Though physically based in San Francisco and New York City, Agora is everywhere. Since its foundation in 2014, Agora serves as a marketplace for decentralized impact investment and philanthropy, allowing individuals to crowd-fund the NGOs, social enterprises, and causes they care about most. Conversely, Agora allows these organizations to obtain funding without having to resort exclusively to government agencies, private foundations, or large-scale impact investors. Additionally, Agora and its network of partner organizations manages standard and venture funds aimed at scaling up both mature and early-stage organizations working in one or more of its six focus areas: poverty, health, education, infrastructure, equality, and environment. – NESsT: Focusing specifically on emerging markets, NESsT provides seed capital, business training, and network access to high-impact startups. Through this three-stage approach, NESsT remains fully involved with the organizations it supports, from their creation and growth until their coming of age as organizationally mature and financially sustainable enterprises. NESsT keeps a diverse portfolio and measures its performance based on a 15-year track record of economic and social indicators. Among the enterprises NESsT supports and whose growth it has accelerated are Peru’s Inka Moss, which sustainably harvests and markets Spagnum moss for plant nurseries across the Americas and beyond, and Café Compadre, a boutique coffee brand that provides coffee farmers with solar technology to sun-roast their organic beans. – Village Capital: Working worldwide and focusing on both democratizing access to opportunity and ensuring the planet’s resource sustainability, Village Capital identifies and supports enterprises in two main categories: 1) health, education, and financial inclusion, and 2) energy and agriculture. Its non-hierarchical, problem-driven acceleration model is unique in that rather than receiving applications from early-stage enterprises, Village Capital first identifies an issue of global importance and then approaches 10 to 12 entrepreneurs who are addressing the issue and have the potential to make valuable contributions to finding its solution. The group then participates in an intense training program. When the program concludes, participants assess each other, and the two highest-ranked ventures receive seed capital investments from Village Capital and its network of co-investors. Some of the ventures funded by Village Capital include Future Pump, Wanda Organic, Parvata Foods, and EFK Group.
According to Gust, an online network of accelerators and early-stage startups, more than 60 accelerators have supported over 1,300 startups in Latin America alone, investing more than $30 million in the region in 2015. Though this sum represents large seed capital investments, sustainable natural products and enterprises still account for a minuscule slice of accelerators’ portfolios despite having enormous potential for social impact and growth – potentiating sustainable agriculture and wild harvest, opening up markets for non-timber forest products, or linking consumers and producers through fairer, more horizontal trade platforms.
Now is the time to harness the power of accelerators to scale up the growth and social impact of sustainable farm and forest enterprises. If you know of other accelerators doing just that, please let us know by contacting us or posting in the comments section below.