Latin American social venture fund holds first close on $20.6m

Mexican VC IGNIA’s first fund, targeting up to $75m, will seek to create social impact throughout Latin America without sacrificing returns.

IGNIA, a socially conscious venture capital investment firm based in Monterrey, Mexico, has held a first close on $20.6 million (€13.3 million) for its first venture fund. Fund I, targeting $50 million to $75 million, is expected to hold a second close by the end of the summer.

The capital raised was anchored by a $10 million commitment from philanthropic investment firm Omidyar Network. Established by eBay founder Pierre Omidyar, the group makes grants and investments in order to maximise the social impact of philanthropic initiatives worldwide.

The fund’s limited partners also include institutions in the US and Switzerland as well as high net worth individuals in the US and Latin America.

Fund I will focus on serving the needs of the low income population in Latin America by developing commercially viable, entrepreneurial businesses in the healthcare, education, housing, nutrition and basic utilities sectors.

Investments will total $2 million to $10 million over the life of a portfolio company. Initial investments will be as small as $500,000.

IGNIA’s investment committee has already approved two investments to date in the healthcare and housing sectors which will be made public in the near future, IGNIA co-founder and former Kohlberg Kravis Roberts executive Michael Chu told PEO

“The only way to respond effectively to issue of poverty is to take that handful of things that have disproportionate impact in terms of poverty and turn them into real attractive commercial enterprises,” Chu said.

Unlike other similar initiatives focused on social change, IGNIA aims to do so without sacrificing returns, said Chu. The group is socially responsible but is also looking to attract “straight commercial investors”.