No one can claim to have absolute wisdom or visibility during these times – at Elevar we certainly don’t. Nonetheless, we believe there is a premium for decisiveness and proactive action. Our entrepreneurial journey, commercial approach to impact investing, invaluable partnerships, and above all, the knowledge that sustained investment and innovation for low income communities around the world is needed has led us to find paths to help us navigate this crisis. Here are a few themes that are core to our approach.
Keeping a pulse on our customers
Staying connected to customers can prove to be a critical key lever to our commercial model to impact investing. In the past, we have seen our customer segment demonstrating resilience (which we have learnt we should never underestimate) and, often, decoupled from macro-level trends. Over the last 15 to 20 years, many global economies where we invest have shown an evolution from “pyramid shaped” to “diamond shaped”, indicating the transition of low income communities to middle income communities. This shift – from pyramid to diamond – has partly been driven by wonderful enterprises that aligned commercial and impact interests. We fear that the crisis will now take us back into “pyramid” territory. We believe that the fragile social safety nets, poor healthcare infrastructure, reduced mobility, impact of lockdowns on businesses, and high dependency on retail jobs and small enterprises will leave low income communities vulnerable, bearing the economic brunt of this crisis. At Elevar, our team and entrepreneurs are establishing multiple touchpoints with customers – to gather insights, make effective decisions, and work together to orient (or re-orient) business models while continuing to serve them effectively.
Collaboration and engagement – within the Elevar portfolio and beyond
We believe that we benefit from a number of partnerships that seek to bolster our ability to navigate crises. One of our most significant partnerships is with our entrepreneurs. We are in particularly close contact with them now, with an eye towards what we can do to provide maximum support. In our view, our entrepreneurs also benefit from being part of the Elevar portfolio, as there is a sense of shared purpose amongst them. This has led them to exchange notes on customer insights, share expertise and initiatives, and engage on several issues including potential cross-revenue opportunities. This comes from the many past efforts to bring them together (for example, two recent Beyond Discussions Events – one with our Latin America entrepreneurs and the other with our India portfolio CFOs).
Our seasoned entrepreneurs are leveraging their past experiences to work through this crisis, and we feel this strengthens our ability to navigate the extreme turbulence we will face over the coming months. Even before the COVID-19 implications gained visibility in their respective countries, many of our entrepreneurs had already put into motion their Business Continuity Plans and taken early initiatives to protect their employees by mandating a ‘work from home’ policy. More importantly, some anticipated the potential effects on their business and began to identify opportunities that may arise.
Another key partnership is with our investors, who have consistently provided us with the capital and have trusted us to build value with our portfolio companies. We are in active conversations to understand the realities of capital availability for our portfolio companies in the future. We have been working with our investors, some of whom are co-investors in portfolio companies as well; we are urging them to double down on the commitments we have already made to our portfolio companies because we believe those investments carry long-term value.
Actively working with our portfolio
Our 35+ companies have reached over 30 million families*, and counting. Our capital has been followed by ~10x in equity**, and a further multiple of that when it comes to debt through the life of our companies. In essence, any dollar we commit to our companies has a significant multiplier effect over time, given the alignment we build with our capital sources and the confidence we have in our globally diversified portfolio.
We need to be nimble to best support our entrepreneurs who are building transformational companies (we have 26 active companies). Our investment teams at Elevar have been connecting with our entrepreneurs, collecting data and taking stock of the portfolio. We have identified a set of criteria to help us to better work with each portfolio company. These include review of cash positions, taking into account broader market challenges, business impact, including calibration on growth, and opportunity, based on capital preservation and re-allocation. We have, in addition, built narratives for each company, that in our opinion are going to be dynamic process based on multiple factors, including execution, how the broader ecosystem responds (i.e. co-investors and regulators), how customer behaviour adjusts, their expectations and needs from us in this environment and how the environment evolves to deliver value to customers.
Diverse Elevar team
We are a leadership team consisting of Johanna Posada (who is working hard with our Latin America portfolio), Jyotsna Krishnan (who is leading with our India portfolio), Sandeep Farias (who is focused on organizational pace and portfolio / investment strategy), Vipul Rawal (who as our dedicated CIO is consistently providing data-driven analytical insights), Amie Patel (who manages and cultivates Elevar’s global partnerships including LP and co-investor relations), Shobha Venkataraman (who leads our finance and compliance function, so the rest of us can focus on our jobs) and Brinda Ganguly (a former LP who we brought on recently as our COO to further bolster our non-investment functions). More importantly, we are supported by an amazing team including Rajat Arora, Akshay Chandrasekhar, Matias Lanus, and Lina Pena, who are managing the front line and day to day interactions with our entrepreneurs and portfolio. In addition, Ankita Kansil, Minal Sequeira and Richa Pandey are providing important support on the legal, finance and marketing / communications front respectively.
As an organization, Elevar’s experience spans the 2008 financial crisis, the 2010 Indian microfinance crisis, the 2016 demonetization in India and several episodes of political uncertainty in Latin America. While the current events are fundamentally different, these events have helped us realize the need to be agile, collaborative and address that which is in our control. It has taught us to leverage our team members’ backgrounds, experiences and diversity (gender, nationality, language, origins, location) to stand a strong chance at addressing the problems and opportunities at hand. As we said in a letter to our entrepreneurs on March 14, 2020, this is the time to double down on our core values.
*As of 30th June 2019
**As of 31st Dec 2019