15 NESsT Portfolio Managers met this week and the previous one in Santiago, Chile for a Scaling Workshop as NESsT takes bold steps toward scaling eight of its social enterprises. All of the social enterprises selected have been in NESsT´s incubation portfolio for at least 3 years, have met or surpassed their projections, and have identified a concrete scaling opportunity. The scaling strategies being considered range from multiplication of end users, diversification of products or services, replication through franchising and partnerships as well as policy adoption.
The Managers have heard from a range of experts on scaling topics including Edmundo Crespo from Francorp in Chile, a company that is a leader in franchising and has guided hundreds of franchising models in Chile and throughout the region; Matias Gutierrez, an investment analyst with the private equity firm Linzor Capital, who presented the key drivers that investment managers assess when growing their portfolio companies; Holly Piper, an Investment Manager with CAF Venturesome in the UK who presented on the range of financing instruments that the organization uses to support the growth of social enterprises in the UK; and Pascal Vinarnic, a private equity and social investor that manages the Demeter Foundation who provided insight on how the Foundation goes about decided the right financial tool for each of its grantees and investees.
NESsT´s challenge is to work closely with its portfolio to identify the right management team, package of capacity support and mixed financial instruments – grants, loans and/or equity- needed by each of these enterprises as they move to significantly increase the number of marginalized communities who can access fair employment, sustainable income and improved quality of life through these scaling efforts.
One of the two social enterprises that have already begun the scaling process is Kek Madar from our Hungary portfolio, an enterprise that manages a highly successful family restaurant and catering business which employs people with physical and intellectual disabilities. The restaurant is not only expanding its catering services, but will now be replicated to three to five small cities in the country. The social enterprise has won a series of awards for their very innovative model that provides dignified salaried employment to an excluded community while providing excellent food and service.
A second enterprise ready for scaling is Reciduca from our Argentina portfolio, a social enterprise that addresses the 20% dropout rate in Argentina by providing life skills and employment training to at risk youth, placing them in companies for a fee, while mainstreaming them back into society. The goal is to continue to grow Reciduca to reach 1000 youths in the next three years and to take the model to other urban centers in the country.