Impact-First Venture Fund Targeting Early-Stage Companies Launches

San José, Costa Rica; March, 2024. Companies within the Mesoamerican region (here defined as the combination of Central America and Southern Mexico) seeking appropriate financing to scale their impact-driven businesses will now have a region-specific option for access to venture capital through the Mesoamerican Catalytic Fund 1 (MCF1), managed by Atta Impact Capital.

 

The fund will support around ten companies over the next three years, providing them with the necessary and appropriate resources to fulfill their potential. MCF1 will make equity and quasi-equity investments, with the possibility of exit via structured redemption, into companies that are generating a positive impact in the region. Through redeemable equity, AIC has the ability to return ownership to founders over time.

 

The launch of MCF1 has been successful thanks to the support of multilateral organizations, foundations, and private contributors, such as the IDB Lab, the innovation laboratory of the Inter-American Development Bank Group (IDB), Fundación CRUSA, Michael Donovan and Steve Dauphin, who join the fund as venture philanthropists and donors seeking to improve access to capital for small and medium-sized enterprises (SMEs) in the region.

 

"The entrepreneurial ecosystem in our region has enormous potential to grow and the opportunities are immense," said Irene Arias, CEO of the IDB Group's innovation lab. "At IDB Lab, we are firmly committed to promoting the development of early-stage companies so that, with innovation and technological leverage, they can generate positive social and environmental impact at scale. This way they can contribute to and be part of the solution to the problems we face, not only in the Mesoamerican region but also throughout Latin America and the Caribbean," she added.

 

AIC will also provide technical assistance to companies in the region to better prepare them for raising capital from institutional investors, as well as for the design and implementation of impact measurement and management (IMM) strategies.

 

“For Fundación CRUSA, strengthening the entrepreneurial ecosystem is essential in order to enable more innovative companies to scale and access financing to facilitate their growth process. Undoubtedly, SMEs have great  potential for creating impact through closing social and environmental gaps and generating economic growth and jobs, both specifically in Costa Rica and in the broader region,” said Flora Montealegre, executive director of Fundación CRUSA.

 

"When designing this fund, we looked for different structures and strategies that would allow us to back missing middle companies in emerging markets," says Abigail Napsuciale, Atta Impact Capital Co-founder and Head of Investments. "We realized that traditional market definitions of fund size, even including micro- or nano-VC, are still relatively large for the region’s ecosystem. Taking this into account, through MCF1 we seek to define as a concept and validate methods for managing "femto-funds," referring to funds of less than $2 million dollars USD. We believe that despite their size, Femto-funds can deploy capital effectively, meeting the needs of the SMEs that drive local community welfare both socially and environmentally."

 

Interested in Investment from AIC?

 

Companies must meet two main requirements: 1) they must be generating revenue, and 2) must possess an intentional and quantifiable case for generating positive impact in the Mesoamerican region. Interested companies can visit Atta Impact Capital's website and fill out the company contact form to initiate the review process (direct link here).

 

As part of their mission, AIC will also seek to facilitate the participation of other local and international investors in regional investment rounds, thus increasing the flow of capital to the Mesoamerican companies beyond their own direct investments through MCF1. By supporting social businesses in this way, AIC seeks to generate a positive and lasting impact in the region, fostering job creation, strengthening local capacity, and enabling environmental restoration.