During this two-hour event, expert speakers from across the investment and start-up ecosystem came together to discuss the growing field of impact investing and unpack why investing in sustainable entities is the future.
On October 26, 2021, the Impact Investment Panel co-hosted by baraka, VentureSouq and startAD took place at DIFC Innovation Hub. The event marked the end of baraka and VentureSouq’s ‘Environmental, Social, and Governance (ESG) Month’, a movement educating audiences about what each ESG has to offer with the purpose of encouraging conscious investing.
Moderated by Sonia Weymuller, Founding Partner of VentureSouq, the Impact Investment Panel comprised of four leading experts: Sheikh Dr. Majid Sultan Al Qassimi, Partner at Soma Mater, Beau Seil, Co-Founder and Partner at Patamar Capital, Raja Al Mazrouei, Executive Vice President of FinTech Hive, and Feras Jalbout, Founder and CEO of baraka.
The discussion covered key topics including the intentionality of impact investing, how to effectively measure impact, its significance for future generations, as well as the challenges and opportunities within the MENA region and beyond. What follows are highlights of the discussion points from each of the panelists.
SHEIKH DR. MAJID SULTAN AL QASSIMI, PARTNER AT SOMA MATER
“Impact is about making a difference where a difference is needed. It’s about finding the gap and catalysing change, rather than waiting for someone to bring a solution.”
Throughout the panel discussion, Sheikh Dr. Majid Sultan Al Qassimi, Partner at Soma Mater, addressed impact investing in the context of the food industry. He noted that the United Nations Sustainable Development Goals are fundamentally important to keep in mind but that it is ultimately up to stakeholders to find ways to properly and effectively incorporate them into their investments to truly make a meaningful impact. “People always look at hunger in reference to Sustainable Development Goal 2; does everybody have food on their plate? This is very broad. The first exercise in our sector is about getting to know the stakeholders and mapping the ecosystem so we can pick the appropriate direction. Ultimately we want to find the right fit,” he said.
Sheikh Dr. Majid Sultan Al Qassimi also went on to encourage investors within the ecosystem to think bigger when it comes to impact and to look at the triple bottom line; namely, food security, carbon offsetting and financial profit. He concluded that it’s possible to win on all fronts instead of making a trade-off. “Typically, everyone wants to make this exchange. You’re either going to feed everybody or achieve carbon offsetting, but you can actually achieve both. Specifically, in the context here, you need to look at which farming methods are appropriate for your environment. Context is everything.”
BEAU SEIL, CO-FOUNDER AND PARTNER AT PATAMAR CAPITAL
“This is not soft stuff. This isn’t just about doing good and hoping things play out. Small is beautiful but scale is necessary. If you can’t get the scale, you’re not going to have any impact really. Your company is not going to survive.”
With 84% of individual investors now interested in using their investing dollars to positively affect social and environmental change, impact investment has exploded in popularity in recent years. Beau Seil, Co-Founder and Partner at Patamar Capital, talked about the evolution of this sub-industry as part of the panel discussion. “Everybody [initially] thought we were just doing philanthropy by another name. I’ve had that conversation I don’t know how many thousands of times with potential investors into our funds,” Seil said. He elaborated on the definition of impact investing, and emphasized the importance of intentionality. “I fundamentally believe you can’t just say that, because you are in one of these sectors – healthcare, agriculture, education or financial services – that you are an impact-driven company or an impact-driven fund. What are you really doing with this platform that is trying to be a sector-defining business that is essentially going to build more resilient societies and economies? And just a better world to live in.”
Referencing his decade-long investing experience at Patamar Capital, Beau illustrated his company’s approach to impact measurement. He cautioned not to go overboard or to be underwhelming when it comes to impact reporting, and rather brought home the importance of focusing on two to three impact metrics that are highly correlated with business success. “Perfect can become the enemy of good in impact. Just because something doesn’t hit every one of your boxes, it doesn’t mean things aren’t moving in the right direction.”
RAJA AL MAZROUEI, EXECUTIVE VICE PRESIDENT OF FINTECH HIVE
“Creating an impact will have a ripple effect for the future. it’s really important for these topics to be championed and communicated over and over again.”
Raja Al Mazrouei, Executive Vice President of FinTech Hive, discussed the increasing focus for startups on transparency and positive impact, whether on the micro or macro level. She examined the importance of ecosystems and enabling environments as a driver for impact investing, highlighting the value of job creation. “We look at impact in many different ways at FinTech Hive. The aim of our programs are to connect startups with business opportunities, investors and talents. To date, these startups have raised around 330 million in funding and this is an area of the impact we look at because we have enabled those startups with the funding required to scale,” Al Mazrouei said. “On the other side, we measure the amount of jobs that have been created within the ecosystem throughout these programs. Also the number of women that have been part of this journey. We run a female talent accelerator program to enable women to access opportunities within tech and innovation, and raise awareness to engage more female talent in those sectors.”
FERAS JALBOUT, FOUNDER AND CEO OF BARAKA
“What drives me is access to markets, access to opportunities and wealth equality. Incentivizing people with a share of the business and being incentivized by that growth story. That is real impact to me.”
An increasing number of people no longer select investments based solely on their ability to generate financial returns. They want sustainable solutions that reflect their values, that make a contribution to the things they consider important. Feras Jalbout, Founder and CEO of baraka, rounded off the panel discussion by sharing his motivation behind highlighting ESG content throughout baraka platforms this month, and launching ESG Leaders as a free theme on the baraka app. He stated that understanding what each ESG component has to offer allows conscious investors to dig deeper into issues that align with them. “We’re making it accessible, highlighting it more through panels like this to get people educated on the topic. It’s very much a grassroots movement, based on feedback from consumers who want access. Ultimately, it’s about giving people access to financial markets, to themes that matter, to themes that are impactful over a longer period of time. This is really our focus,” Jalbout said.
In response to questions from the audience, Feras Jalbout also shed light on measuring success when it comes to Limited Partners (LPs). “The ultimate measure if what you’re doing is successful from your LPs is whether they keep coming back. If you are investing for impact, then following up with your fund manager, and if they’re hitting their metrics and doing well as a fund – you’ll have a base of LPs that keep coming back,” he said.
Disclaimer: baraka is regulated by the Dubai Financial Services Authority (DFSA)