Like it or not, social venture is becoming a “thing.” Some have claimed social impact investing will be the next venture capital. According to a 2014 report from the Urban Institute, 1.44 million nonprofits were registered with the IRS in 2012—8.6 percent more than in 2002. In 2012, the nonprofit sector was a $887.3 billion industry. More than $335 billion was given to nonprofits in 2013. Also in 2013, over a quarter of American adults volunteered for organizations.
UC-Berkeley’s Haas School of Business has been ahead of the game. Last Friday (April 10), Haas hosted its 16th annual Global Social Venture Conference and Competition. This year, about 600 teams from nearly 40 countries submitted applications in October to compete for $50,000 in prizes. In turn, 18 teams were selected to present their ventures to a panel of judges. Out of those 18, six were chosen to present 10-minute presentations for the grand prize of $25,000.
The six finalists who presented covered programs ranging from a micro health insurance program from Indonesia that uses garbage as a financial resource to an American-based venture dedicated to providing quality roofing in slums around the world to a natural disaster communication device for Red Cross volunteers.
This year’s winner was Drinkwell, a venture using a micro-franchise model to establish local water businesses in areas that have high arsenic levels in the water. The company touts delivering 60 times more water and doing it 17 times more efficiently than the current best practice of purifying drinking water, Reverse Osmosis. The founding team is made up of Arup SenGupta, a chemical engineering professor at Lehigh University, Minhaj Chowdhury, a Forbes 30 Under 20 Entrepreneur, Mike German, a PhD student studying under SenGupta, and Sanjay Verma, an entrepreneur and advisor to other entrepreneurs.
THIS YEAR’S COMPETITORS BETTER THAN PREVIOUS YEARS
“Every year the judges talk about the quality of teams but this year almost all of the judges said the quality of teams was improved over other years,” says Jill Erbland, a senior program manager at the Lester Center for Entrepreneurship at Haas. “They were certainly impressed with the teams. It was tough for them to make a decision on who made the top six and then who won. They said it was more difficult of a decision this year than past years.”
The judges consisted of an eight-member panel made up of venture advisors, research fellows, entrepreneurs and investors. Nabbing second place and $15,000 was ReMaterials. Third place and $7,500 went to Lakheni, which gives low-income communities access to quality food while developing micro-retail enterprises and supporting early childhood development centers in South Africa.
TWO HAAS VENTURES MAKE FINAL SIX
ReMaterials and Xendit, a smart-phone based money transfer enterprise, were the two teams from Haas to make the finals. Xendit was founded by current MBA student, Moses Lo, whose background includes working for Boston Consulting Group and Amazon. He also has a family lineage of entrepreneurship. He used BCG as a learning step stool to break into the California tech scene.
“I knew I needed to come to California because I was interested in tech,” Lo says. “There’s a guy I’m good friends with who did the same degree and scholarship program here at Haas and I took his advice.”
Lo, who was also looking at Stanford’s Graduate School of Business and Northwestern’s Kellogg School of Management, was set on the entrepreneurial path as soon as he stepped on campus. As a first year, he helped organize the LAUNCH Startup Competition and took courses in the Lester Center.
‘EVERY ENTREPRENEURSHIP WANNABE SHOULD TAKE BOTH OF THOSE COURSES’
The two courses that Lo says stood out to him and flipped his entrepreneurial switch were Toby Stuart’s and Rob Chandra’s Life as an Entrepreneur and Doug Galen’s Entrepreneurship Workshop for Startups. “Every entrepreneurship wannabe should take both of those courses,” Lo says. “The guidance and oversight from those professors and courses helped so much.”
Lo bided his time, learning as much as he could during his first year. Then in May, he had the idea to make money transfers easier across the world. He is a self-proclaimed immigrant from Malaysia, Australia and now America and says he knows first-hand the headache of wiring money from one country to another. But he also knew how difficult additional service fees could be for money-strapped people.
The idea became even more personal and fell into the social venture category when Lo met Dierdra—an immigrant currently working in San Francisco and sending money back to her family in Indonesia. Currently, money transfer services can add an additional $10 (Transferwise) to $33 (Xoom) in service fees for a transfer. Diedra was losing about $6,000 every year through service fees of transferring money. Xendit has developed technology and relationships with local banks and convenience stores in North America, along with many Asian countries and Australia, in attempt to offer the lowest service fees.