The investee who changed me: “AFRIpads made me realise you have to focus”
An injection of capital can be game-changing for a social enterprise – but what about the effect of that relationship on those putting down the funds? Our new mini-series, in partnership with EVPA, invites social investors to share their personal stories of investees who have changed their thinking. First up, Piet Colruyt, founder of Impact Capital in Belgium
Every investment changes me: there is always a lesson learned. But if I have to choose one, it’s AFRIpads.
I heard about them in 2011 when they were pitching at a conference in Amsterdam. In Uganda, girls miss school three days a month because of their periods, so AFRIpads provides reusable sanitary pads at 30% of the cost of other products on the market. Enabling girls to go to school helps break the cycle of them getting lower marks, quitting school, and having children earlier. It was a nice story.
They were looking for €50,000. At the time we had a small fund that didn’t require lots of due diligence. So I invested – rather blindly! I think we’re the second-biggest investor in this company; the company crowdfunded from the Netherlands so they have a few dozen small investors. They made a profit of €300,000 in 2017 and they employ around 160 people, most of them women. They expanded in Kenya and Malawi and are looking at how to go to Nigeria and South Africa, so it’s really going well.
Two years ago I visited them in Masaka with my daughter. I was having dinner with the co-founders, Sophia and Paul, in a restaurant and I asked them what was the most important lesson they’d learned.
They said: “If we’d listened to our shareholders, we’d have gone bankrupt.” Because their shareholders were saying: “Why is the plastic you’re using not biodegradable? Why isn’t the cotton organic? Why does the cotton come from China and not from local producers?” That would have been impossible.
For me that was the biggest lesson. As social entrepreneurs you want to change the world, but you have to find the right balance – and accept that 80% or 90% good is better than the ideal, if the ideal makes it impossible to survive.
They want to solve everything, but they fail because it’s not possible. Then the question is, where is the impact?
When people pitch they often want to try to find new models, and they say: we’ll open a restaurant and everything will be organic, fairtrade, local and affordable, and all vegetarian, and we’ll hire disabled people. They want to do everything. And finally at the end of the month, they can’t pay their bills.
I see many, many people with good intentions. They want to solve everything, but they fail because it’s not possible. Then the question is, where is the impact if it fails?
AFRIpads is the leading manufacturer and largest commercial supplier across Africa of reusable sanitary pads – to date, serving over 3.5m women and girls.
AFRIpads’ first investor is a real businessman: he makes finance-first investments. We’re a good combination: if it was only me, as a social investor, maybe I would be too flexible on financial conditions. If it’s only finance-first, then you might face mission drift. The conditions set by the investor from a more finance-first perspective (with interest rates that are more like 8% than 2%), together with one who is social-first – I think this combination has the most probability of being a success.
For me, the question is always: what do you want to achieve with your company? If it’s to promote veganism, focus on that. If it’s to create nice jobs for people with disabilities, that must be your focus. But don’t try to do everything at once.
The funny thing is that myself, I often feel really more the social entrepreneur with too many ideas! I don’t have any focus at all – if you look at my portfolio, it’s 80 investments... although there is a logic behind it, and we are trying to refocus a bit. But that’s another story.
Want to share your own story about the entrepreneur or organisation that changed your life? Let us know: email@example.com.
Hear more insights and share lessons learned with a whole community of investors and philanthropists at the EVPA annual conference on 5-7 November, the Hague. Tickets here.