Author: Arvind Agarwal, Founder & CEO – C4D Partners
Publication: Outlook
Asia is one of the world’s fastest-growing economies but continues to be encumbered by social and environmental challenges. The dichotomy of Asia is strange; it is home to some of the world’s smallest and poorest countries and also some of the largest and richest. Rapid urbanization, burgeoning population and ceaseless demand for resources and services have exacted their toll on the society and environment. These social and environmental challenges offer substantial potential for social enterprises and impact investors. A plethora of Asian startups in the nascent phase are trying to create innovative solutions that can make a difference in the everyday lives of people. As a result, the landscape for social impact investing in Asia is rife with opportunities for investors.
After enduring the exacerbating effects of the global pandemic, Asia is set to turn a page and eye global investments to address its social and environmental concerns. At a time like this C4D Partners, an Impact Fund Manager, is striving to leapfrog the gaps between the have and the have nots by way of social impact investing. With investments in innovative social impact startups, they aim to cultivate a culture of social and financial return optimization.
C4D Partners was founded in 2013 as ICCO Investments, a subsidiary of ICCO Cooperation, a Dutch-based international NGO in the Netherlands. After capitalizing the initial corpus from ICCO Cooperation into 30 promising and inclusive companies worldwide, the team spun out of ICCO and C4D Partners came into being in 2017. These initial years provided C4D with an invaluable learning curve to effectively invest in numerous startups spanning multiple countries and sectors during challenging times. With the insights and experiences of these intense years, the company learned to build a robust investment strategy for a new Fund. The first-hand experience in investing gained in these years, along with combined expertise and belief that these companies have the potential to grow into inclusive economies, laid the groundwork for a solid investment strategy for C4D Asia Fund.
Co-founded by industry experts Arvind Agarwal and Marcel Neutel, C4D Asia Fund was established in 2018 to deliver a lasting impact and a risk-adjusted market return for the investors. By September 2020, the company has invested $19 million in 24 growing and inclusive SMEs, of which 65% are women-owned or women-led SMEs. The team has fully vested the India allocation from the C4D Asia Fund and is striving to launch a dedicated India Fund. With the aim to foster the innovative culture of social impact startups in Asia, C4D wants to make a difference in the everyday lives of people.
The team of C4D Partners strongly believes that where the wellbeing of people and the environment go hand in hand with economic principles, you develop a responsible strategy. This way, Sustainable Development Goals can be achieved and investors’ expectations of market-adjusted returns can be managed as well. The thought behind the inception of C4D Partners was to prove that investors can make decent returns while investing in impact/ social businesses. For long, the impact investing sector has focussed on either financial institutions or tech plays; C4D wants to change this mindset by investing in impact-driven startups in other sectors, generating decent returns for the investors and bringing about a lasting impact in the lives of people.
The outbreak of Covid-19 has brought about a paradigm shift in the investment landscape in India. Amidst deep concerns from investors regarding business continuity and preparedness in case something similar strikes the world, India has fared well. Since the initial disruption in 2020, the business community has responded and adapted quickly. Business leaders didn’t hesitate to pivot from how business was conducted in the olden days. The ubiquitous technology adoption became a critical success component for the investment sector. There is no denying that the pandemic has accelerated businesses to adopt and develop technology-led solutions. The positive impact can be witnessed across the industry and in the lives of their customers. Owing to this, ESG investors have a larger role to play in the coming future to ensure balanced growth between planet, people and profit.
C4D Partners have elaborate plans in mind for the South-Asia market by launching a dedicated India Fund. The company plans to raise $50-70 million for its India dedicated Fund and intends to reach out to potential investors by mid-2022. The company’s strategy is to invest in nascent stage companies operating across various sectors such as agriculture and allied activities, food processing, retail and consumer goods, clean energy, healthcare, skilling and education, water and sanitation and financial inclusion, among others. The company’s goal is clear to focus on businesses that have the potential to create an evident positive social or environmental impact along with market adjusted returns.
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