Sarona Asset Management and Crowdfunding Platform Lendahand Collaborating with USAID to Provide Financing for Women-Led Funds and Enterprises
Written by Lily Zhou on 17 December 2021
Sarona Asset Management, a pioneering private equity firm focused on frontier and emerging markets and Lendahand, an innovative crowdfunding company, have announced partnerships with the U.S. Agency for International Development (USAID) CATALYZE project to scale investment in women-led funds and businesses. Sarona and Lendahand will use catalytic capital from USAID to mobilize upwards of $32 million for women-owned businesses in four years. Managed by Palladium, CATALYZE is an eight-year program funded by the USAID designed to unlock $2 billion in private sector financing for development impact.
Under the partnership, Sarona Asset Management will create a new private equity fund of funds, anticipated to raise $100 million by September 2024, with at least $25 million invested in women-led funds or women-led small and medium businesses. Sarona will leverage a $4.3 million grant from CATALYZE as first-risk capital and strengthen its gender-smart investing approach.
“We are excited to launch this major collaboration to fill gaps in capital access for women-led businesses. Our partnership with CATALYZE has allowed Sarona to hire a dedicated Senior Impact Associate focused on improving our staff’s understanding of gender-lens investing principles and enabling them to support our local partners in putting women in positions of power within their firms and in their portfolio companies,” shared Serge LeVert-Chiasson, Chief Operating Officer and Chief Compliance Officer at Sarona Asset Management Inc. “As it deploys its next-generation private equity fund of funds between 2022 and 2025, Sarona will aim to identify women-led fund managers and women-led businesses that have been historically disadvantaged in raising funds.”
Netherlands-based Lendahand will enhance its crowdfunding platform to better attract and increase funding for women-led small businesses in emerging markets. A $1.2 million grant from CATALYZE will enable the crowdfunding company to develop algorithms to better assess the creditworthiness of women-led enterprises and improve engagement and volume with gender-focused investors using its platform. In the next three years, Lendahand expects to raise $120 million in financing for small businesses, of which at least $7.2 million will go to women-led businesses.
“Lendahand allows everyday people to lend to women-led SMEs in emerging markets. We believe that if you want to tackle big global problems, you can only do that by mobilizing citizens. Our partnership with CATALYZE will enable us to upgrade our technology so that we are able to source and onboard more women-led businesses and at the same time make it easier for investors to pick and choose such companies to invest in,” said Koen The, CEO of Lendahand. “We are puzzled why women-led businesses are under-represented in emerging markets. Research has proven that women-led companies do better than their male counterparts. On top of that, women tend to invest 90 cents of each extra dollar they earn in their family and immediate environment, leading to better schooling, healthcare, and eventually economic growth. It seems like a win-win.”
Globally, only an estimated 2 to 3% of total capital is flowing to women fund managers across both private equity and venture capital. This equates to approximately 0.9% of the world’s $69 trillion in assets under management, resulting in a $300 billion financing gap for women-led small and medium enterprises worldwide.
“We believe Sarona and Lendahand will provide further proof points that gender-smart funds and small businesses are attractive investments for the private sector,” said Amanda Fernandez, Executive Director of CATALYZE. “When it comes to accessing finance, the odds are stacked up against women entrepreneurs and women fund managers, particularly first-time fund managers. If more financial institutions and investors adopt gender-smart investing, it can scale to transform local and global markets while creating a more equitable society.”
About USAID’s CATALYZE project
CATALYZE, implemented by Palladium, was launched in October 2019 to support local and international businesses and investors, as well as other key market actors to solve the world’s most pressing challenges. Over eight years, CATALYZE intends to unlock $2 billion in private-sector financing for development impact, especially in underserved social sectors and frontier countries, using up to $250 million in catalytic capital from USAID. CATALYZE enables USAID missions and bureaus to meet their development objectives and those of host countries and regions by designing and delivering innovative programs in target countries and sectors that can be sustained over time with private capital.
For more information, please visit https://www.usaid.gov/catalyze.