Presentation by Wim Van Der Beek
-
Upload
tbli-conference -
Category
Economy & Finance
-
view
664 -
download
5
description
Transcript of Presentation by Wim Van Der Beek
InvestingInvesting at the at the
Base of the Base of the PyramidPyramidWim van der BeekWim van der Beek
AavishkaarAavishkaar GoodwellGoodwell
I n v e s t g o o d. D o w e l l.
ContentsContents1.1. IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell
2.2. Case 1: Case 1: ScalingScaling upup microfinancemicrofinance
3.3. Case 2: Case 2: FranchisingFranchising in the BOPin the BOP
4.4. Case 3: Case 3: MicroMicro--ventureventure
5.5. LeasonsLeasons learninglearning
6.6. MainstreamingMainstreaming sustainablesustainable PEPE: : CrossingCrossing the the chasmchasm
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwellInvestingInvesting in entrepreneursin entrepreneurs
in the Base of the in the Base of the PyramidPyramid
toto createcreate socialsocial valuevalue and and
generategenerate financialfinancial returnsreturns
““The bottom line is simple: The bottom line is simple:
It is possible to It is possible to
“do well by doing good.”“do well by doing good.”
(CK (CK PrahaladPrahalad) )
BenefitsBenefits of of scalescale: : correlationcorrelation insteadinstead of a of a tradetrade--offoff
betweenbetween socialsocial impact and impact and financialfinancial returns!returns!
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell
!! InvestingInvesting in the BOP in the BOP scalescale effecteffect
!! Private Private equityequity in in microventuresmicroventures and and microfinancemicrofinance, 3 pools, India focus, 3 pools, India focus
!! BlendedBlended valuevalue strategystrategy: : scalingscaling upup, , efficiency, efficiency, leverageleverage, , mainstreamingmainstreaming, , distribution distribution networksnetworks
!! ApproachApproach: risk : risk capitalcapital and handholding, and handholding, financialfinancial discipline, discipline, rigorousrigorous private private equityequity approachapproach in in missionmission drivendriven settingsetting
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell!! Team: expertiseTeam: expertise
and and experienceexperience,,
basedbased in India and NLin India and NL
!! Track record: 1st Track record: 1st fundfund 20012001
AavishkaarAavishkaar India Micro VC India Micro VC FundFund
AwardAward--winnerwinner, case studies, case studies
!! Professional Professional investorsinvestors: : HNWsHNWs,,
foundations, foundations, developmentdevelopment banksbanks,,
commercial commercial banksbanks, , corporationscorporations,,
institutionalinstitutional investorsinvestors, , FoFsFoFs
!! AlliancesAlliances withwith commercial commercial banksbanks, , NGOsNGOs, donors , donors
Mumbai team
Hyderabad team
Case 1: Case 1: ScalingScaling upup microfinancemicrofinance!! MicrofinanceMicrofinance
worksworks!!
!! Commercial MF Commercial MF worksworks betterbetter
!! GrowthGrowth modelmodel
!! IgnitingIgniting the the acceleratoraccelerator
•• EquityEquity fundingfunding
•• CapacityCapacity buildingbuilding
MicrofinanceMicrofinance worksworks forfortypicaltypical microcredit microcredit clientsclients::
MicrofinanceMicrofinance alsoalso worksworksin in otherother formsforms::
Payments
Casualtyinsurance
Life & healthinsurance
Savings
High High repaymentrepayment ratesrates
!! SocialSocial collateralcollateral
!! ClimbingClimbing loanloan ladderladder
!! Short Short loancyclesloancycles
!! RegularRegular meetingsmeetings
CostCost and risk and risk controlcontrol
!! Standard productStandard product
!! DoorstepDoorstep--bankingbanking
!! Group Group processprocess
!! StaffStaff rotationrotation
The The microfinancemicrofinance model model worksworks::
MFI
Branch 1 Branch 80
Staff # 1 Staff # 6
Center 1 Center 20
Group 1 Group 5
80 branches80 branches
450 field 450 field staffstaff
8000 centers8000 centers
40.000 40.000 groupsgroups
200.000 200.000 clientsclients
Microbank: a Microbank: a scalablescalable modelmodel
The microfinance (r)The microfinance (r)evolutionevolution
3.0 BOP financial services
2.0 Development tool
1.0 Poverty alleviation
!!!Banks and investment funds
!!!!!Philanthropists and social investors
!!!!!!!NGOs, networks, Dev agencies
Capacitybuilding
Growthcapital
Loans
MicrofinanceMicrofinance growthgrowth constraintsconstraints
Commercial Commercial growthgrowth model model worksworks::
-200
0
200
400
600
800
1.000
2005 2006 2007 2008 2009 2010
0
50
100
150
200
250
300
350
400
Net Profit/Loss, !k Clients
Microfinance start-up growth model
Source: Goodwell
Economist 5 november 2005 Business plan MFI startup
ScalingScaling upup: : investinginvesting in in growthgrowth
-200
0
200
400
600
800
1.000
2005 2006 2007 2008 2009 2010
0
50
100
150
200
250
300
350
400
Net Profit/Loss, !k Clients
Microfinance start-up growth model
Source: Goodwell
Business plan MFI startup
EntrepreneurialEntrepreneurial MFIsMFIs
!! EarlyEarly stage and stage and growthgrowth phasephase
!! New New generationgeneration
GrowthGrowth capitalcapital
!! WorkingWorking capitalcapital
!! Cap Cap requirementsrequirements
!! => => leverageleverage
SupportSupport
!! CapitalCapital structuringstructuring
!! GovernanceGovernance and and transparancytransparancy
!! MIS and planningMIS and planning
!! TechnologyTechnology
!! InnovationInnovation in in productsproducts and and distribution models distribution models ((franchisingfranchising))
Handheld device for remotemicrofinance transactions, www.sevaksolutions.org
ScalingScaling upup: : investinginvesting in efficiencyin efficiency
Case 2: Case 2: FranchisingFranchising in the BOPin the BOP!! Distribution is the major Distribution is the major growthgrowth
constraintconstraint forfor product/service product/service deliverydelivery in the BOPin the BOP
!! Traditional distribution: Traditional distribution: concentricconcentricorganicorganic growthgrowth model, partnering model, partnering withwith NGOsNGOs, , wholesalewholesale pushpush
!! AlternativeAlternative: : franchisingfranchising, , mainstreammainstreamkiller killer appapp
WhyWhy franchisingfranchising in the BOP ?in the BOP ?!! Parallel Parallel rollroll--outout of distribution of distribution outletsoutlets
!! StandardizationStandardization, , endend--toto--endend solutionsolution, , fit in fit in supplysupply chainchain
!! BundlingBundling of of processprocess, systems, , systems, training and training and fundingfunding
!! Branding and Branding and qualityquality assuranceassurance
!! Risk managementRisk management
!! CreatingCreating a a newnew generationgeneration of of entrepreneurs in BOPentrepreneurs in BOP
FranchisingFranchising model in the BOPmodel in the BOP
Training, systems, etc
Equityinvestor
BankFranchisor
Entrepreneur(Franchisee)
Case 3: Case 3: MicroventuresMicroventuresCraftsbridgeCraftsbridge: : !! Handicrafts design and Handicrafts design and
marketingmarketing!! Corporate gifts marketing Corporate gifts marketing
strategystrategy!! Production outsourced to Production outsourced to
micromicro--entrepreneurs, entrepreneurs, talented Indian artisanstalented Indian artisans
!! InvestmentInvestment $ 100k in 2003$ 100k in 2003!! Rigorous handholding by Rigorous handholding by
AavishkaarAavishkaar Micro VC FundMicro VC Fund!! 400% 400% growthgrowth in 2 in 2 yearsyears!! Outreach with 13 NGOs Outreach with 13 NGOs
and 100+ craftsmenand 100+ craftsmen!! www.craftsbridge.comwww.craftsbridge.com
LessonsLessons learninglearning!! SmallSmall deal deal sizessizes, high engagement:, high engagement:
manage manage costscosts, , increaseincrease benefitsbenefits byby::
•• StandardizingStandardizing processprocess (e.g. (e.g. franchisingfranchising))
•• Support Support withinwithin portfolio portfolio networknetwork
•• AlliancesAlliances withwith donors, donors, capacitycapacity buildersbuilders
!! OperatingOperating in a in a missionmission--drivendriven settingsetting
•• ScaleScale = = socialsocial impact = impact = financialfinancial returnsreturns
•• ManagingManaging different different expectationsexpectations
MainstreamingMainstreaming sustainablesustainable PEPE““CrossingCrossing the the chasmchasm” (Moore)” (Moore)
!! EarlyEarly adoptersadopters: enthousiasts and : enthousiasts and visionariesvisionaries, “, “storiesstories”, ”, customizationcustomization
!! EarlyEarly majoritymajority: : pragmatistspragmatists, “, “evidenceevidence”, ”, standardizationstandardization, user , user friendlyfriendly
!! BeachheadBeachhead: “: “wholewhole product”, product”, compatibilitycompatibility: high impact, high return: high impact, high return
!! Bowling Bowling alleyalley: product/: product/marketmarketsegmentationsegmentation (eg (eg HNWHNW, , institutionalinstitutional))
ThankThank youyouAavishkaarAavishkaar Goodwell IndiaGoodwell India
VineetVineet RaiRai
AavishkaarAavishkaar IndiaIndia
Micro Venture Micro Venture FundFund
201 & 221, Atlanta 201 & 221, Atlanta EstateEstate,,
Dr. Dr. AmbedkarAmbedkar ChowkChowk,,
OffOff western Express western Express HighwayHighwayGoregaonGoregaon East, East, MumbaiMumbai 400101400101
PhonePhone 9191--2222--39535292, 2877825539535292, 28778255MobileMobile 9191--98206457369820645736www.aavishkaar.orgwww.aavishkaar.orgwww.intellecap.netwww.intellecap.net
AavishkaarAavishkaar Goodwell Goodwell NetherlandsNetherlands
Wim van Wim van derder BeekBeekGoodwell Investments B.V.Goodwell Investments B.V.MediacentrumMediacentrum 341341SumatralaanSumatralaan 45451217 GP 1217 GP HilversumHilversumThe NetherlandsThe Netherlands
TelTel +31.35.6772661+31.35.6772661MobMob +31.6.46080801+31.6.46080801www.goodwell.nlwww.goodwell.nl
InvestingInvesting at the at the
Base of the Base of the PyramidPyramidWim van der BeekWim van der Beek
AavishkaarAavishkaar GoodwellGoodwell
I n v e s t g o o d. D o w e l l.
ContentsContents1.1. IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell
2.2. Case 1: Case 1: ScalingScaling upup microfinancemicrofinance
3.3. Case 2: Case 2: FranchisingFranchising in the BOPin the BOP
4.4. Case 3: Case 3: MicroMicro--ventureventure
5.5. LeasonsLeasons learninglearning
6.6. MainstreamingMainstreaming sustainablesustainable PEPE: : CrossingCrossing the the chasmchasm
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwellInvestingInvesting in entrepreneursin entrepreneurs
in the Base of the in the Base of the PyramidPyramid
toto createcreate socialsocial valuevalue and and
generategenerate financialfinancial returnsreturns
““The bottom line is simple: The bottom line is simple:
It is possible to It is possible to
“do well by doing good.”“do well by doing good.”
(CK (CK PrahaladPrahalad) )
BenefitsBenefits of of scalescale: : correlationcorrelation insteadinstead of a of a tradetrade--offoff
betweenbetween socialsocial impact and impact and financialfinancial returns!returns!
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell
!! InvestingInvesting in the BOP in the BOP scalescale effecteffect
!! Private Private equityequity in in microventuresmicroventures and and microfinancemicrofinance, 3 pools, India focus, 3 pools, India focus
!! BlendedBlended valuevalue strategystrategy: : scalingscaling upup, , efficiency, efficiency, leverageleverage, , mainstreamingmainstreaming, , distribution distribution networksnetworks
!! ApproachApproach: risk : risk capitalcapital and handholding, and handholding, financialfinancial discipline, discipline, rigorousrigorous private private equityequity approachapproach in in missionmission drivendriven settingsetting
IntroductionIntroduction AavishkaarAavishkaar GoodwellGoodwell!! Team: expertiseTeam: expertise
and and experienceexperience,,
basedbased in India and NLin India and NL
!! Track record: 1st Track record: 1st fundfund 20012001
AavishkaarAavishkaar India Micro VC India Micro VC FundFund
AwardAward--winnerwinner, case studies, case studies
!! Professional Professional investorsinvestors: : HNWsHNWs,,
foundations, foundations, developmentdevelopment banksbanks,,
commercial commercial banksbanks, , corporationscorporations,,
institutionalinstitutional investorsinvestors, , FoFsFoFs
!! AlliancesAlliances withwith commercial commercial banksbanks, , NGOsNGOs, donors , donors
Mumbai team
Hyderabad team
Case 1: Case 1: ScalingScaling upup microfinancemicrofinance!! MicrofinanceMicrofinance
worksworks!!
!! Commercial MF Commercial MF worksworks betterbetter
!! GrowthGrowth modelmodel
!! IgnitingIgniting the the acceleratoraccelerator
•• EquityEquity fundingfunding
•• CapacityCapacity buildingbuilding
MicrofinanceMicrofinance worksworks forfortypicaltypical microcredit microcredit clientsclients::
MicrofinanceMicrofinance alsoalso worksworksin in otherother formsforms::
Payments
Casualtyinsurance
Life & healthinsurance
Savings
High High repaymentrepayment ratesrates
!! SocialSocial collateralcollateral
!! ClimbingClimbing loanloan ladderladder
!! Short Short loancyclesloancycles
!! RegularRegular meetingsmeetings
CostCost and risk and risk controlcontrol
!! Standard productStandard product
!! DoorstepDoorstep--bankingbanking
!! Group Group processprocess
!! StaffStaff rotationrotation
The The microfinancemicrofinance model model worksworks::
MFI
Branch 1 Branch 80
Staff # 1 Staff # 6
Center 1 Center 20
Group 1 Group 5
80 branches80 branches
450 field 450 field staffstaff
8000 centers8000 centers
40.000 40.000 groupsgroups
200.000 200.000 clientsclients
Microbank: a Microbank: a scalablescalable modelmodel
The microfinance (r)The microfinance (r)evolutionevolution
3.0 BOP financial services
2.0 Development tool
1.0 Poverty alleviation
!!!Banks and investment funds
!!!!!Philanthropists and social investors
!!!!!!!NGOs, networks, Dev agencies
Capacitybuilding
Growthcapital
Loans
MicrofinanceMicrofinance growthgrowth constraintsconstraints
Commercial Commercial growthgrowth model model worksworks::
-200
0
200
400
600
800
1.000
2005 2006 2007 2008 2009 2010
0
50
100
150
200
250
300
350
400
Net Profit/Loss, !k Clients
Microfinance start-up growth model
Source: Goodwell
Economist 5 november 2005 Business plan MFI startup
ScalingScaling upup: : investinginvesting in in growthgrowth
-200
0
200
400
600
800
1.000
2005 2006 2007 2008 2009 2010
0
50
100
150
200
250
300
350
400
Net Profit/Loss, !k Clients
Microfinance start-up growth model
Source: Goodwell
Business plan MFI startup
EntrepreneurialEntrepreneurial MFIsMFIs
!! EarlyEarly stage and stage and growthgrowth phasephase
!! New New generationgeneration
GrowthGrowth capitalcapital
!! WorkingWorking capitalcapital
!! Cap Cap requirementsrequirements
!! => => leverageleverage
SupportSupport
!! CapitalCapital structuringstructuring
!! GovernanceGovernance and and transparancytransparancy
!! MIS and planningMIS and planning
!! TechnologyTechnology
!! InnovationInnovation in in productsproducts and and distribution models distribution models ((franchisingfranchising))
Handheld device for remotemicrofinance transactions, www.sevaksolutions.org
ScalingScaling upup: : investinginvesting in efficiencyin efficiency
Case 2: Case 2: FranchisingFranchising in the BOPin the BOP!! Distribution is the major Distribution is the major growthgrowth
constraintconstraint forfor product/service product/service deliverydelivery in the BOPin the BOP
!! Traditional distribution: Traditional distribution: concentricconcentricorganicorganic growthgrowth model, partnering model, partnering withwith NGOsNGOs, , wholesalewholesale pushpush
!! AlternativeAlternative: : franchisingfranchising, , mainstreammainstreamkiller killer appapp
WhyWhy franchisingfranchising in the BOP ?in the BOP ?!! Parallel Parallel rollroll--outout of distribution of distribution outletsoutlets
!! StandardizationStandardization, , endend--toto--endend solutionsolution, , fit in fit in supplysupply chainchain
!! BundlingBundling of of processprocess, systems, , systems, training and training and fundingfunding
!! Branding and Branding and qualityquality assuranceassurance
!! Risk managementRisk management
!! CreatingCreating a a newnew generationgeneration of of entrepreneurs in BOPentrepreneurs in BOP
FranchisingFranchising model in the BOPmodel in the BOP
Training, systems, etc
Equityinvestor
BankFranchisor
Entrepreneur(Franchisee)
Case 3: Case 3: MicroventuresMicroventuresCraftsbridgeCraftsbridge: : !! Handicrafts design and Handicrafts design and
marketingmarketing!! Corporate gifts marketing Corporate gifts marketing
strategystrategy!! Production outsourced to Production outsourced to
micromicro--entrepreneurs, entrepreneurs, talented Indian artisanstalented Indian artisans
!! InvestmentInvestment $ 100k in 2003$ 100k in 2003!! Rigorous handholding by Rigorous handholding by
AavishkaarAavishkaar Micro VC FundMicro VC Fund!! 400% 400% growthgrowth in 2 in 2 yearsyears!! Outreach with 13 NGOs Outreach with 13 NGOs
and 100+ craftsmenand 100+ craftsmen!! www.craftsbridge.comwww.craftsbridge.com
LessonsLessons learninglearning!! SmallSmall deal deal sizessizes, high engagement:, high engagement:
manage manage costscosts, , increaseincrease benefitsbenefits byby::
•• StandardizingStandardizing processprocess (e.g. (e.g. franchisingfranchising))
•• Support Support withinwithin portfolio portfolio networknetwork
•• AlliancesAlliances withwith donors, donors, capacitycapacity buildersbuilders
!! OperatingOperating in a in a missionmission--drivendriven settingsetting
•• ScaleScale = = socialsocial impact = impact = financialfinancial returnsreturns
•• ManagingManaging different different expectationsexpectations
MainstreamingMainstreaming sustainablesustainable PEPE““CrossingCrossing the the chasmchasm” (Moore)” (Moore)
!! EarlyEarly adoptersadopters: enthousiasts and : enthousiasts and visionariesvisionaries, “, “storiesstories”, ”, customizationcustomization
!! EarlyEarly majoritymajority: : pragmatistspragmatists, “, “evidenceevidence”, ”, standardizationstandardization, user , user friendlyfriendly
!! BeachheadBeachhead: “: “wholewhole product”, product”, compatibilitycompatibility: high impact, high return: high impact, high return
!! Bowling Bowling alleyalley: product/: product/marketmarketsegmentationsegmentation (eg (eg HNWHNW, , institutionalinstitutional))
ThankThank youyouAavishkaarAavishkaar Goodwell IndiaGoodwell India
VineetVineet RaiRai
AavishkaarAavishkaar IndiaIndia
Micro Venture Micro Venture FundFund
201 & 221, Atlanta 201 & 221, Atlanta EstateEstate,,
Dr. Dr. AmbedkarAmbedkar ChowkChowk,,
OffOff western Express western Express HighwayHighwayGoregaonGoregaon East, East, MumbaiMumbai 400101400101
PhonePhone 9191--2222--39535292, 2877825539535292, 28778255MobileMobile 9191--98206457369820645736www.aavishkaar.orgwww.aavishkaar.orgwww.intellecap.netwww.intellecap.net
AavishkaarAavishkaar Goodwell Goodwell NetherlandsNetherlands
Wim van Wim van derder BeekBeekGoodwell Investments B.V.Goodwell Investments B.V.MediacentrumMediacentrum 341341SumatralaanSumatralaan 45451217 GP 1217 GP HilversumHilversumThe NetherlandsThe Netherlands
TelTel +31.35.6772661+31.35.6772661MobMob +31.6.46080801+31.6.46080801www.goodwell.nlwww.goodwell.nl