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How companies can invest in innovations at the BoP

Corporate Impact Venturing event

On March 9, 2016, Endeva is hosting a one-day practitioner dialogue in Munich to discuss emerging trends in the field of Corporate Impact Venturing with inclusive businesses. Click here for more information on the program and speakers and to register!

Background

The base of the global economic pyramid (BoP) represents a $5 trillion USD market opportunity. For corporates, a promising route to step into the BoP market opportunity is an inclusive business-focused corporate impact venturing strategy. By investing into local business, corporates can learn about low-income markets and relevant business models and tap into growth opportunities while hedging their risk of failure.

Local inclusive businesses also benefit from collaboration with corporates. Many inclusive businesses have successfully developed innovative BoP business models locally. Examples include new technologies such as mobile health and off-grid energy solutions, new distribution models such as micro-franchises, or new efficient operating models such as specialized clinics or low-cost schools. Through corporate impact venturing, local businesses get access to finance to grow these business models. In addition, local businesses may also receive access to useful management knowhow, complementary technologies, and new markets. Finally, the larger corporate can enable the business to grow faster and replicate in other countries.

Corporate Impact Venturing—focused on inclusive business investees—combines the strengths of corporates and inclusive businesses, and thus addresses the constraints that limit the impact on either side. While constraints still exist in this nascent arm of venture capital, the opportunity horizons offered to corporates, inclusive businesses, and BoP communities at large are promising and warrant concerted effort to develop more enabling environments for the practice to continue to flourish.