North Meets South: A Global Imbalance of Impact Investments

When we look at equality across investments, most people think of a gender lens or a racial lens, but do you ever think about the access to capital that entrepreneurs have in emerging markets versus those in more developed markets? Research shows that in the US, pre-seed funding rounds are on average half a million dollars; and seed rounds are about $4 million.  Within the enterprises in the Sankalp network across Asia and Africa, an average company has raised less than a million dollars with 4 years of business operations.  For many of the companies we work with small ticket sizes of $20,00 or $40,000 are instrumental to their fully functioning businesses, while idea stage enterprises in the US are raising an average of half a million dollars.  Funding the first mile in the US seems very expensive than the first kilometer in Africa or Asia – investors could invest in 10 operational companies in emerging markets with the same amount they are spending on just one idea in the US.  Why can’t we change this dynamic to create a truer form of equitable impact investing?