Investment Readiness Programme in Colombia with The Boston Consulting Group
Since 2016, our team in Colombia has been running an accelerator programme in collaboration with The Boston Consulting Group (BCG). The goal of the programme is to build the ecosystem around social business in Colombia and help those with a high potential to become ‘investment ready’. At YSB Colombia - we curate the entire programme and provide tailored advice on social impact for each entrepreneur. Leveraging the networks and tools of both YSB and BCG, the goal of the programme is to help the start-ups maximise their social impact while reaching financial sustainability.
During our investment process, we look for companies that are not yet mature enough for us to invest in, but have all the right social ambitions and a business model with potential for growth. The Investment Readiness Programme offers six to eight different companies the chance to grow through the guidance and support of a BCG consulting team. On the completion of the eight week consultancy, we host a pitch event where the most respected CEOs in Colombia choose one winner to receive a full time consultancy from BCG for two months.
In the first stage the team of consultants work with the entrepreneur to tackle one business challenge. Each business is assigned three consultants from BCG, senior, mid-level and junior. Over 8 weeks they get to know the entrepreneur, the market and the main challenges they are facing. It’s incredibly useful for the entrepreneur to get specific feedback and guidance on their issue area, be it marketing, sales, finance or human resources. The final winner of the programme receives a two month full-time consultancy, where the consultancy team will prepare deliverables every two weeks. At the end they present a concept of where, how, and what is needed for the business to grow.
"We are now approaching the fourth edition of the programme,” Ernesto Daza, from Yunus Social Business Colombia explained, “Through the experience of the last three cohorts, we can really appreciate how deeply the consultancy has altered the perspectives of the social entrepreneurs that took part, from the core of their businesses to their understanding of how they can scale. Normally, social entrepreneurs at this stage are in the rush of everyday tasks and short term goals, the programme is aimed to encourage social entrepreneurs to take a step back, think strategically and then execute the learnings, thus scaling faster and with meaning."
Last year’s winner: Like U
Like U creates dignified jobs and income for women in Colombia. The company provides outsourced business services such as customer service, marketing & sales and back office. They maintain part time and full time jobs, allowing women the flexibility to combine work and family life and minimise travel costs. The consultancy from BCG allowed them to dive deeper on the topics of human resources, social impact and their strategies for growth.
Nuno Monteiro, Senior Partner & Managing Director in BCG, on a publication related to IRP shared “some of the common challenges that social businesses everywhere face are structural in nature, such as informality, lack of access to financing, insufficient infrastructure, and a need for greater educational opportunities, yet there are also hurdles that our partnership can help them overcome by strengthening the value chain and providing professional guidance for the entrepreneur. In this way, we arm them to address the structural limitations”.
The cohort for 2019 is in full swing. The chosen businesses are:
Kasa Wholefoods Company
In the market for six years, Kasa Wholefoods Company, produce healthy, natural juices. Their objectives are clear: to save the Colombian rainforests from illegal mining, deforestation and the drug trade by dissuading farmers to illegally cultivate coca crops. They are passionate about transforming agriculture for the better!
Clearpath Coffee connects small coffee growers and cooperatives in Colombia with roasters and importers looking for high-quality speciality coffees from unique origins, while making producers the majority partner in the sales process.
Grou aims to connect smallholder farmers to urban buyers, minimising brokerage in the supply chain. Smallholder farmers lack market access to sell their products. In fact, only 2% of them can sell their harvests directly at the central market. This exposes the farmers to unfair power dynamics with brokers, reducing their margins and forcing them to take on most of the risk
Grou finds buyers for farmer’s products through different channels, increasing their margins and bringing equality back into the system.
Justo Pago create better opportunities for handyman workers to impact their lives for the better. The business model was created through a process of market research with the real estate agencies sector. They found problems with client services, pricing and time efficiency, so a new business model was created to solve these issues. The CEO, Juan Camilo Perdomo told us “the idea for Justo Pago was born when I was working for a construction company I started to share life experiences with the handyman workers. After talking to them I learnt that their economical situation was very complicated and this had a direct impact on their families and communities. Justo Pago was created to mainly generate a social impact for these workers and guarantee a fair price relationship between the workers and their clients”
To disrupt the current allocation methods of social impact funding making it cheaper, leaner and easier. Every year in Latin America $1.5 billions of dollars are wasted due to inefficient funding allocation processes: social entrepreneurs must go through complicated and costly processes, while institutional donors waste time and effort looking for the best projects to support. This too often leads to funds not being used ($650 million every year) and budgets reduced in following years. If Sustainable Development Goals are to be funded and reached, the system needs a clear change and Innpactia are trying to make it happen.
While living with the indigenous communities of Barichara in 2015 the founder of Wonder for People came across the “Choclatos community” who wore Alpargatas shoes. Alpargatas are a sacred indigenous type of shoe used traditionally in the region. Wonder for People aims to maintain the iconic tradition of Alpargatas so they do not get lost in time. They also work hard to increase income and knowledge boosting opportunities for the community.
We are really excited to see how the next cohort progress, watch out of the blog for the winner!