My article for YourStory.in.
There is currently a $1 trillion opportunity in impact investing, in which the current industry trend is to invest in enterprises in emerging markets that are ready to scale. While India is a hub for impact investing and social enterprise, neighboring Pakistan’s social enterprise ecosystem is only slowly maturing. Acumen Fund is one of the few impact investors in Pakistan and until recently, no one was working at the seed-stage of the investment pipeline.
Recognizing this opportunity, Invest2Innovate (i2i) launched in September 2011 as an intermediary organization to address the social enterprise seed-stage capacity development and funding gap in Pakistan and other nascent markets. i2i first identifies high potential early-stage enterprises at the point of implementation that have innovative, BOP-focused approaches. i2i then provides tailored business development and operational support, market analysis, and access to an angel network for advisory support and seed-stage funding in the range of $50,000 – $200,000. They will soon launch a four-month Lahore-based accelerator program with monthly workshops and training that will help i2i entrepreneurs in building their business and prepare them to pitch the angel community for funding.
Founder and CEO Kalsoom Lakhani was previously working in philanthropy and running a popular blog on Pakistan. In these roles, she regularly met and supported Pakistani entrepreneurs that had few resources and little to no access to capital to start their ventures. Lakhani devised i2i based on her observations about what the entrepreneurship ecosystem was lacking in Pakistan and other similar emerging markets. Most important to Lakhani is finding the right business models for social impact and promoting social investment deal flow in untapped markets. “I want to scale good business models…In order to enable social change, you have to have viable social business models,” says Kalsoom.
Invest2Innovate works with non-profit and for-profit organizations that are impact-oriented. Eligible ventures must be financially sustainable or break even within their first three years. Working in a risky part of the pipeline, i2i is aware that their early-stage entrepreneurs have a high risk of failure, which is why i2i also analyzes the entrepreneur’s capacity during the selection process. “One big lesson for us over the last year is that you need the passion, fire, and tenacity to fulfill your objectives and to deal with the bad and the good. We bring on entrepreneurs that won’t just turn around and give up. Does this person have what it takes to do this? Do they have ‘it’—that special sauce—that can push the operation forward? That’s something we look for,” explains Lakhani.
New markets for i2i could eventually include countries in Southeast Asia and North Africa. But presently, Lakhani plans to focus on i2i’s work in Pakistan before scaling outward. “It’s very exciting working in a place like Pakistan because it’s a new space, so the opportunities are endless,” says Lakhani. “But Pakistan also faces challenges including a volatile market, security issues, and access to finance. It’s a little bit of an uphill battle, which is a good challenge.”
Find more information about Invest2Innovate here.