In Aavishkaar’s annual impact report, you can find a summary of progress made by their portfolio companies and the opportunities ahead. The 2015 Impact Report featured our Community Based Fishery Management project, their first investment from the Aavishkaar Frontier Fund and their first in Indonesia. We believe in Aavishkaar’s mission because they’re constantly negotiating their responsibilities as an investment firm seeking true social impact. They lead an important and evolving conversation we’re happy to be a part of.
Aavishkaar founder and CEO Vineet Rai opens each annual impact report with his CEO’s Message, an open letter to the public. On the delicate balance of running an effective impact investment group, Rai writes,
“For us impact is integral to the act of investing; something that can be seen and felt by looking at the investments we made. We always looked at Impact as an outcome, like we saw financial returns – Find the right entrepreneur with the right business, the scale of which makes impact. Over time, we looked at impact more closely and scrutinized our results around livelihoods we created, and vulnerabilities we addressed.”
Aavishkaar constantly picks apart their understanding of impact. There’s a relentless effort to ensure both financial and social impact are realized. Rai goes on to explain, “There is no doubt that our investments make impact but do they transform lives? If so, to what degree? Are all stakeholders touched by us better off, after we touched them through our investments.”
Founded in 2001, Aavishkaar sought to develop a groundswell of change through small investments in well-meaning entrepreneurs. The team soon discovered their model had limits. They weren’t able to achieve scale and, as a result, sustained impact over time. Re-examining the model, Aavishkaar committed to invest in projects built for scale. More specifically, scalable models that leverage traditional methods of production.
The shift in model has proven a success. Here’s a look at the results in 2015:
- 28,285,010 people provided access to affordable products and services
- 43,471 low income producers provided market access
- 20, 746 woman producers provided market access
- 34,276 people employed
- 9,469 women employed
- Employees from low income households earned USD $35.1 million
When you think about the question of scale, there’s a chance you jump to Silicon Valley. That’s no coincidence. Aavishkaar adopted the Silicon Valley model of venture capital and made three important innovations to provide more effective capital in emerging economies:
- Move the investment risk from technology and product innovation to innovation in execution.
- Redefine the parameters of blockbuster success – a return of 5 to 10 times of invested capital, instead of a return of 100 times.
- Build a team with limited fee and no grant support by identifying young and experienced investment managers driven by passion, social recognition and fulfillment in work.
Now, with the Aavishkaar Frontier Fund, Aavishkaar will broaden their reach to South East Asia. As the first investment in the fund, the Community Based Fishery Management project is an opportunity for Aavishkaar to prove their model in Indonesia. We are developing a fishery management model that allows fishers to access the sustainable seafood market directly. We’re addressing the broken supply chain that exists in Indonesia’s eastern reaches. By engaging directly with the fisher communities, we will maximize the value of their catch while providing actionable insights around fishing effort for more sustainable fishery management. Construction is underway on the first of four Fishery Community Centers.
Stay tuned for Aavishkaar Impact Report 2016.