If you head for this talk on YouTube you will have a treat – 11 minutes of a seemingly shy, barefooted, yet very confident young Dutchman called Stef van Dongen, who calls himself “just a small entrepreneur from the Netherlands who doesn’t have money to pay for expensive advisers”. Today he’s the Founder and President of Enviu Group. He and Enviu have come a long way from that hesitant talk in 2011. But the groundwork for what Enviu does was there set forth very clearly. Van Dongen talks about his near-death experience on a volcano, an event that changed his life: “It was in that moment that I decided that everything I would do next should be meaningful. That’s why I started Enviu.”
Enviu’s first start-up, in 2008 was something called Sustainable Dance Club, based on the question “can we make a night out dancing better for the environment than staying at home?” So Enviu came up with the idea of a dance floor that produces energy – and not just the dancing energy, but the dance floor itself becomes one big electricity generator. Since then Enviu has established 13 social enterprises and many innovation programmes. According to the company it “works from an issue, to a business idea, to a social multinational that drives system change” and focuses on three areas: financial inclusion, the circular economy, and food systems. This year it planned to bundle together its portfolio into a single impact investment Holding Company, with its own dedicated management team.
Senior Investment Manager with the Holding Company is Kevin Wervenbos and he drew my attention to one of the Holding Company’s latest ventures, People’s Pension (PP), which has the strapline “making pensions affordable and available to all”. If we think we have pension problems in the UK, they are nothing compared to the problems of living into old age in developing countries.
A remarkable 85% of the world’s population has no pension plans, according to Enviu, yet more than 20% of the populace of developing countries will be aged 60+ by 2050. Even planning for a pension in such places is virtually impossible – in Africa, for example, around 80% of those employed are working in the informal sector, where wages and employment are to say the least irregular. Pension providers (where they exist) are not equipped to deal with these kinds of savers, who at best may be able to make small and sporadic transactions.
The solution developed by Enviu is to have tailor-made flexible pension products designed for informal sector workers, with low administration costs, distributed through partners and designed to be scalable internationally. The testbed for the PP is Ghana, where there are 27 other pension trusts which together have captured just 1% of the informal sector market. Clearly there’s a social need for this kind of pension; since 2016 5,000 Ghanaian workers have joined the pension fund, and PPH has signed a memorandum of understanding with a local union to offer the pension product to more than 80,000 members. Vodafone Ghana has agreed to act as a distribution and collection platform for these micro-pensions. PP has big plans for expansion – by 2021 it aims to have 500,000 participants in Ghana, 1.25 million across Africa, with €61 million assets under management in Ghana and €100 million across the continent.
Enviu’s Holding Company says that through grants, debt and equity fund-raising it intends to continue its work of developing and implementing “business solutions to solve issues that affect +100 million marginalised people”. To that end it aims to raise €15 million by the end of the first quarter of 2018, a big ambition as that €15 million is almost 50% of what it has raised to date. It believes it is a realistic target looking at the capital needs of the existing portfolio companies in the next 2 years and the pipeline. But, according to Enviu, while only 10% of all start-ups “succeed in making it through the valley of death” no less than 70% of “all social ventures developed by Enviu exit the valley of death”.
Key to all Enviu’s social impact is the determination that social multinational characteristics should be designed and built-in from the outset of any new venture. It is avowedly committed to long-term investing, the kind of patient capital that can support a deal flow of 2 to3 portfolio companies a year until 2020. By that date, Enviu “aims to have impacted the lives and habitats of over five million people worldwide”. Its approach to social investing is intrinsically about driving fundamental changes to flawed systems. Thus in the case of PP in Ghana, prior to launching the business Enviu had to become actively involved in the country’s pension advisory board, to facilitate changing the law to allow a micro-pensions’ company to operate.
Given this trajectory and philosophy it’s no surprise that Enviu’s Holding Company has decided to join the Social Stock Exchange. The Social Stock Exchange is according to Enviu the answer of meeting the liquidity needs of investors in a social portfolio that requires patient capital.
In a space of slightly more than a decade Enviu has moved from the neat idea of converting the efforts of movers and shakers on a dance floor into energy, to gathering rather different movers and shakers to generate enough energy to change the world. That is impressive.
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