Thirty Years of Impact Investing
A note from SEAF CEO and Co-founder Bert van der Vaart
Over the course of thirty years, SEAF has grown from a USD 300,000 pilot grant from USAID to provide equity to a small injection molding shop in Costa Rica, into a leading global impact investor, touching more than 30 countries. SEAF co-founder Tom Gibson and I had never imagined that SEAF would scale to this level –deploying more than USD 550m of growth capital through over 420 SME investments. We were simply focused on finding a way to provide small-scale businesses in emerging markets with the equity funding and business partnering they needed to grow. We knew that high interest, short-term loans were not the answer, but instead that, given the chance to grow, local entrepreneurs could provide the employment and wealth creation their communities so desperately needed.
Beginning with that small experiment in Costa Rica, we found ourselves providing equity and business partnerships to fledgling entrepreneurs all over Central and Eastern Europe after the fall of the Berlin Wall. From pet food to book stores, and from demining machinery to distributed solar power, we found a sustained need for growth. This need was exacerbated by the workers left behind by the inefficient, now-bankrupt state-owned companies. Consumers were seeking products and services they voluntarily wanted, instead of the poor-quality shoes and limited variety of foods they previously had to wait in line to receive. We managed to raise more than $17 million for a dedicated impact fund (before the words impact and investing were even joined together) that went on to make 41 investments and employ 25 professionals across Poland. As the Fund turned profitable, we were spun out from our parent not-for-profit, CARE, and became SEAF – the Small Enterprise Assistance Funds.
Since then, SEAF has crossed the globe, from Russia to Latin America, China, the Balkans, Afghanistan, Southeast Asia, Africa and soon the Caribbean. We’ve made more than 400 investments in small and medium-sized enterprises (SMEs) in emerging and frontier markets. We launched Centers for Entrepreneur and Executive Development (CEED), a global network of more than 30,000 entrepreneurs focused on building their businesses. We have partnered with institutions across the globe to effect change on a local level, with entrepreneurs that are equipped to bring about the impact needed in underserved communities.
It has not always been easy to invest in SMEs in countries where economies are still taking shape. Working with first generation entrepreneurs with no experience marketing or working with capital has not come without its difficulties. But the tens of thousands of jobs we have created and the elation of watching entrepreneurs care about their local communities and employees, testifies that the work we do, with our partners’ help, can make an enormous and sustainable difference.
It is our hope that over the next 30 years, SEAF will continue to develop funds and other investment products that address the significant societal problems that governments are just not able to meet. Central to these efforts is the work of our local professionals, who are committed to the development of the countries and people in the places they call home, and who through SEAF can see how their communities connect with the rest of the world. Roughly 85% of our employees live in the countries which we serve. We have always worked to match the commitment of our entrepreneurs to their communities through the reinvestment of our profits back into these communities. We strive to maintain local investment operations through continued fund operations – in fact, our logo was designed to demonstrate the continuous cycle of our capital through local markets.
This work could not have been achieved, nor will it be achieved moving forward, without the hard work and dedication of our investees, as without them, we could not create Impact Through Entrepreneurs. We also thank our Directors, our investors and our staff who understand the value of transparency, accountability and teamwork. With such help, we together been able to achieve so much more than we could imagine.