Doing Less with More: A Global Imbalance of Impact Investments
Channel: Sankalp Forum
Date: 2022-11-16

When we look at equality across investments, most people think of the gender lens or the race 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 Sankalp's network across Asia and Africa, an average company has raised less than a million dollars with 4 years of operations.  
 
For many of the companies Sankalp works with, small ticket sizes of $10,000  to $20,000 could be 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 much more expensive than the first kilometre in Africa or Asia – investors could invest in more than 20 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 more true form of equitable impact investing?