Catalytic Investment in Africa –  IE’s Recognition as an Impact Investor

by | Sep 6, 2023 | Blog

Innovation Edge (IE) is thrilled to have secured a second place for the Catalytic Investor of the Year Award at the Africa Impact Investment Award event hosted by Krutham. The announcement took place during a virtual ceremony on 31 August 2023. As an impact-first investor, this prestigious recognition highlights the important work IE is doing in catalysing funding to innovations that improve the early experiences of children in South Africa.

IE’s Investment Principal, Adliya van Niekerk shares insights on what this acknowledgement means for our organisation, the early childhood sector and impact investing in Africa.

What does this second place win mean for Innovation Edge and the work the organisation does in supporting innovation in the ECD space?

Getting nominated for the Catalytic Investor of the Year award is really important for the early childhood development sector because it’s really giving credence to a sector that is usually thought of as only being an imperative of the government or the philanthropic sector as an investable space. Also, this nomination really highlights Innovation Edge as the kind of impact investor that can support and grow the types of social enterprises that can create the sustainable impact for South Africa’s youngest citizens, especially those from the poorest households. There is a tendency to view the capital spectrum as binary but impact investors like Innovation Edge are showing that we can create societal good using innovative approaches and hybrid instruments – we just need to invest early.

Why is it important for organisations like Innovation Edge to be recognised as catalytic impact investors?

Social entrepreneurs require tailored financial and non-financial support in the start-up phase and that’s why early-stage investors like Innovation Edge are very important. We provide bespoke structuring and technical assistance as well as the testing ground for these committed teams to build the evidence of impact and financial performance that make them attractive to follow-on investors. When organisations like Innovation Edge get recognised for their ability to catalyse private investment to these kinds of social entrepreneurs it makes the space more attractive for other innovative thinkers, gives other investors confidence and crowds in capital to a very underfunded sector in South Africa, namely ECD.

What are your hopes for the future as an impact investor in promoting innovation and creating social change?

As an impact investor, our aspirations for the future include scaling up successful ECD innovations, extending their reach to underserved communities, and collaborating with like-minded partners who are supporting the Africa Impact Investing awards like AVPA, Impact Investing SA and SAVCA. This recognition provides a platform to amplify our efforts, attracting attention and potential collaborations that could accelerate positive outcomes in early childhood development.

How do you think this nomination will help raise awareness about the importance of impact investing in driving social innovation?

Intellidex, and now Krutham, has been an industry leader in this sort of market intelligence and them being the facilitator of these awards really means that we are reaching an audience greater than those who care about creating profit with purpose. Through our nomination for this award, we are able to profile our social entrepreneurs and expand the network of support we can provide for the social innovators who are solving the challenges in early childhood. This recognition can lead to increased engagement from not just investors, but policymakers, and the public, fostering a broader understanding of the impact investing ecosystem.

What message would you like to share with other investors and organisations who are passionate about making a positive impact through investments?

Being catalytic doesn’t mean that you have to do it alone. It is a big win for the ECD sector that our fellow nominees, FirstRand Foundation, and SAB Foundation are organisations that have partnered with us in the past and we’ve laid a strong foundation for partnership in the future. Our message to other investors is that attaining long-term impact is going to take collective effort but we have the engines in Africa that can funnel resources into priority  sectors – we just need sustainable support.

We hope that this recognition will amplify our joint efforts to build a robust ecosystem of support for impact investments and help us foster potential collaborations that can bring more change in the lives of young children. We will continue using impact investing as a powerful tool for driving social innovation and we hope to inspire other investors who’re not necessarily in the ECD space, to join us in making a positive impact by investing early.