Scaling Access to Finance for Early Stage Companies in Emerging Markets
At the beginning of this year Triple Jump, through the Dutch Good Growth Fund (DGGF), released their latest report “Scaling Access to Finance for Early-Stage Enterprises in Emerging Markets: Lessons from the Field” that focuses on the supply side of finance for one of the most underserved “missing middles” – the early-stage companies in frontier and emerging markets. In this report we explore how to improve the scalability and viability of early-stage finance provision, thereby reducing the need for philanthropic capital and subsidies to the local providers of finance and support to early-stage enterprise. We identified three main archetypes of early-stage finance providers to study in detail, namely:
• business accelerators;
• business angel networks;
• early-stage venture capital funds;
• together with supplemental, non-traditional debt options.
Each of these four categories detailed in the report face challenges in provision of finance to early stage companies in emerging markets, and any investment approach needs to reflect the sophistication of local ecosystems and create their funding modality accordingly.
The report was formally launched at Sankalp Africa 2019 Summit in Nairobi in February 2019, in a discussion panel with Collaborative for Frontier Finance, Iungo Capital, Novastar Ventures, and Village Capital, which was facilitated by Open Capital Advisors. The panel reflected on the findings and recommendations of the report and discussed other critical questions, challenges and opportunities to scale access to finance for early stage companies. You can find the online conversation by following the DGGF/SCBD Facility Twitter, and the hashtag #DGGF, as well as learn more about the findings and recommendations of the report: