By Our Reporter
The Omidyar Network has today released a report laying out how frontier capital, or early stage risk capital in emerging markets, can be an effective tool for investors to achieve financial returns and social impact in Africa. The report surfaces existing opportunities available to investors today and offers insight into which of those opportunities is best for particular portfolios.
The frontier capital opportunity focuses on companies developing products and services for people who earn roughly US$ 2 to US$ 8 per day. These people fall between the very bottom of the economic pyramid-where many impact investors currently focus-and the existing middle class. This means they have greater purchasing power and a steadier income, but still greatly benefit from products and services that improve their lives.
The report, ‘Frontier Capital: Early Stage Investing for Financial Returns and Social Impact in Emerging Markets’, draws from extensive interviews with leading investors, data analysis, and a meta-analysis of existing research.
“Frontier capital sits at the convergence of venture capital and impact investing. The report offers investors guidance on how to approach early stage investments in emerging markets, identifying key considerations that will help better align funders with opportunities. By studying entrepreneurs who are targeting low- and lower-middle-income populations, this report identifies a major market opportunity that can also improve the lives of hundreds of millions of people,
