Thoughts from the Last Mile Welcome to the VillageReach Blog
09.03 2009

Greetings from SoCap

Greetings from SoCap, the annual gathering of social entrepreneurs and investors here in San Francisco, billed as the largest of its kind in the world.  Yesterday was a flurry of sessions covering topics as varied as India social business developers strengthening remote tribal communities through weaving and arts and craft cooperatives, to new pharmaceutical ventures for low income countries to benefit base of the pyramid communities.

And VillageReach was there too.  Craig Nakagawa, our CFO, and Keely Stevenson, from Bamboo Finance, lead a great session on the just-announced investment in our Mozambique propane business, VidaGas. Titled “Anatomy of a Social Investment,” the session covered the development of the business, its impact on the health system it was created to serve, and Keely and Craig looked at future opportunities for social businesses in Sub Saharan Africa.Helping Hands

A couple of interesting takeaways from the session:

– the need for patient investors in social business ventures is key for both the initial development and long-term sustainability of these businesses.  In our case, VillageReach’s hybrid non-profit/social business model has proven to be very valuable.  Initial investment for VidaGas was supported by donor contributions, that otherwise would have been spent on the purchase of fuel and equipment that VidaGas sells to the market.  We see this approach as a winning formula for donors who are interested in achieving long-term impact for their contributions.

– Keely noted there are few base of the pyramid social ventures operating today.  Some businesses have been created that serve middle-income communities that then attempt to reach out to lower-income consumers, but this can be a challenge where profitability is a requirement.  Keely highlighted VidaGas’ market development approach as ideal, whereby we launched the company with the government health system as our initial anchor client, with some sales to lower-income communities also and then moved up-market to epand sales of the fuel to middle income consumers.

The investment has only just been announced, but we’re looking ahead to the future.  This week we’re meeting with a number of new investors to present a new proposal to broaden our base of household sales.  We’ve put together a comprehensive market development proposal that is intended to add new retailers for propane and stimulate greater interest from communities who have previously had to rely exclusively on charcoal for their cooking requirements.

Onward and upward.

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