Series of articles with investors: impact investment, will it change the world?
At the Innovating Justice Fund, we firmly believe that justice-tech startups have the potential to make a real difference in the world. These startups focus on improving access to justice for millions of people. They have taken the road less traveled, putting people and communities in the centre and solving their most pressing justice problems, in a way that works best for them. They are able to provide breakthrough, scalable solutions in a fast and easy manner, which creates impact across many sectors.
Yet, the justice-tech sector, like other impact sectors, faces a paradox: the entrepreneurs most likely to create successful and impactful solutions are often overlooked by investors. These startups are often overlooked because they haven’t yet found a viable financial model. However, with proper guidance and tools, they have the potential to discover and develop a strong yet impactful financial model.
Imagine then investing to scale these startups and replicate their success stories in other areas of the world. Could this bring about significant changes to how we live?
We are starting a new series of articles for the Innovating Justice Fund. In each article, we talk to an investor to explore the potential of impact investment to create positive change in the world, whether it’s in justice-tech, ed-tech, health-tech, or even fin-tech. We also want to understand how we can create a supportive environment for impact investment to thrive and genuinely transform lives. Today, we have the privilege of hearing from Michelle Mouracade, the Impact Fund Advisor at AlFanar.
What is impact investing from your point of view?
I think there is only one point of view on this one. An impact investment is an investment that is made to generate both a financial return as well as a measurable and scalable social and/or environmental impact.
Will it change the world?
Yes. Impact investing has the potential to change the world by helping social entrepreneurs advance the sustainable development goals (such as alleviating poverty, providing access to quality education, reducing inequalities, climate change and environmental degradation…) which in turn would lead to more peace and social stability as well as a more sustainable future for all. For example, one of our portfolio social enterprises, FabricAID is focused on establishing a socially and environmentally conscious value chain for the apparel industry by optimising collection, sorting, upcycling, and resale of second hand clothes through socially conscious and sustainable brands. Their model is therefore helping limit the socio-economic and environmental damage of fashion by offering decent clothing at extremely affordable prices to marginalised communities through a dignified shopping experience. In less than 5 years, they were able to expand to Jordan, create 120 jobs and support over 152,000 vulnerable individuals to access affordable clothing, while diverting more than 332,000 kg of textile from landfills.
Their own income alone wouldn’t have been enough to get them to this stage of growth and, although Alfanar provided them with grant funding and technical assistance over multiple years, the size of grants is usually small compared to an investment and is not enough to help them double in size and open in other countries. It’s the same as with any entrepreneur who starts with their own funds, then family & friends, and then gets investors on board.
In the case of a social enterprise, like FabricAID, it’s only by getting the support of impact investors that they can grow further in order to scale their impact on vulnerable communities and on the environment.
Whether it’s a social enterprise like FabricAID, or a justice-tech startup like Haqdarshak- the pioneer recipient of the Innovating Justice Fund’s first impact investment – one thing is certain: impact investment holds the potential to bring about significant transformations, particularly for a vast number of people. Haqdarshak is a remarkable startup dedicated to simplifying access to government welfare schemes, ensuring it becomes easy, swift, and hassle-free. Their services have already made a profound impact, positively influencing the lives of over 280,000 citizens and bolstering more than 37,900 microbusinesses.
Inspired by the awe-inspiring achievements of such startups, we, in collaboration with Fount, initiated the Innovating Justice Fund. Our primary goal is to invest in and amplify the impact of justice-tech startups, directing their solutions towards the communities that require it the most.
If you’re eager to delve deeper into the Innovating Justice Fund and explore our diverse portfolio of groundbreaking startups, we warmly invite you to get in touch.
About Michelle Mouracade
Michelle Mouracade is currently focused on supporting Alfanar to launch a USD $50 million regional impact investment fund to help extend the financing life cycle for successful and promising businesses with impact across the MENA region. Michelle has 26 years of experience in strategy, HR and organisational consulting across several sectors in the US, Europe and 7 locations in Asia. Her experience covers a wide range of industries and functional expertise, from banking to internet start-ups and from business development to transformation programs. In 2016, Michelle joined Alfanar as Country Director for Lebanon and managed to grow the portfolio from 4 to 20 social enterprises and to reach financial sustainability by providing training and management support to 100+ social enterprises. Alfanar is the first venture philanthropy organisation in the Arab world that supports social enterprises with long-term funding, engaged management support, customised training and access to markets.