Social venture fund holds second close on $34m

Latin American venture firm Ignia’s second round added $13.6m to the fund’s first close in early June. The firm expects to hold a final close on its debut fund, which is targeting up to $75m, in early 2009.

Ignia , a socially conscious venture capital investment firm based in Monterrey, Mexico, has held a second close on $34 million for its debut venture fund, which is targeting up to $75 million.

Fund I had been expected to hold a second close by the end of the summer. Ignia is now projecting that it will reach its target of $50 million to $75 million in early 2009. The firm held a first close on $20.6 million in June.

Investors in the most recent round include the multilateral investment fund of the Inter-American Development Bank, a US family foundation and European and Latin American high networth individuals.

Earlier this month, the fund also closed a debt facility of up to $25 million from the Inter-American Development Bank.

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.

To date the firm has made two investments, putting $3 million into urban healthcare company Primedic and $2 million into Mexican affordable housing development Jardines de Grijalva.

“The only way to respond effectively to the 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,” Ignia co-founder and former Kohlberg Kravis Roberts executive Michael Chu told PEO in June.

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”.