Where venture capital meets impact investing.
In Omidyar Network’s newest report, we explore what we’ve termed frontier capital: early stage risk capital in service of low- and lower-middle-income populations in emerging markets. Living on $2-8 per day, this population sits between the very poorest and the established middle class. Compared with the bottom of the pyramid, they have steadier income streams and greater purchasing power—$3 trillion worldwide—but are also in danger of slipping back into poverty without services and opportunities.
Major shifts—from the rapid spread of mobile phones, to the increased flow of capital toward developing economies, to rising levels of entrepreneurship in countries like India and Colombia—have given rise to a new wave of companies specifically focused on this population. Take Microensure, which provides insurance to lower-income populations so that they can avoid catastrophic income shock, or Geekie, whose products offer students tools they couldn’t otherwise afford to help them study and prepare for tests. There are just two examples of companies that are achieving both financial returns and social impact with business models that hold greater promise for venture capitalists and impact investors alike.
And these are just the tip of the iceberg. “Frontier Capital: Early Stage Investing for Financial Returns and Social Impact” identifies a range of investing opportunities in emerging markets that require varying appetites for risk, returns, and social impact. We explore a full range of businesses, from those that are applying proven models to emerging market contexts, to innovations that could create entirely new sectors. For each of three core segments, we provide guidance about the types of investors and investment tools that are going to be the most successful in creating both financial returns and social impact, thereby impacting the lives of hundreds of millions of people worldwide.
We invite you to read the full Frontier Capital report here.
You can also download the Frontier Capital Executive Summary here.