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Digital Subscriptions > > Patience is a virtue

Patience is a virtue

Barbara Szewcow spoke with Alberto Gómez-Obregón, portfolio director at Acumen Fund about its investment approach and its programme to train the next generation of social entrepreneurs
Alberto Gómez-Obregón, portfolio director at Acumen Fund

Jacqueline Novogratz, CEO of Acumen, has said that patient capital “takes the best of the markets as well as philanthropy and aid”. How can these three simultaneously produce optimal results?

The ethos or the philosophy behind the patient capital model within Acumen is that we are using the tools of capitalism as a means to solve a problem rather than as an end to simply focus on a financial return. Our capital and strategy are centred around the consumer at the bottom of a pyramid. Those people have a very small disposable income and it takes a long time to reach them and make them feel comfortable with the new products or services. It is time consuming to achieve a sustainable business model when you cannot increase the amount of sales.

I would like to mention an example of one of our companies called d.Light which has been a very successful investment for Acumen and a very clear illustration of how our patient capital works. We came into d.Light about ten years ago, in its C-round. I think that they were the first company, which was testing solar lanterns in an affordable way to bring electricity or at least lighting to communities with no access to the grid. Nobody, at that point in time, was investing in these types of high-risk products. Historically, solar energy has been extremely expensive but d.Light found a formula to bring solar energy to an affordable product, and so we took a risk early on. Initially, these solar lanterns were a little bit more expensive yet now they are very cheap. We have installed almost 20 million lanterns and reached about 70 million people in the last ten years. Today, d.Light is starting to finally be an attractive investment opportunity for purely commercial capital. We have been with them during their whole life cycle, we came in for their series A and subsequent [funding] rounds, and through all of Acumen’s vehicles we have deployed a significant amount of capital into this company.

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