3rd annual report demonstrates initial impact of the Fund’s 18 million diverse, global portfolio
NEW YORK | July 18, 2022 – The Rockefeller Foundation released its annual Zero Gap Fund: 2021 State of the Portfolio report capturing the crucial role that catalytic capital plays in enabling investment solutions to solve the world’s most pressing challenges. Across its seven investments to date, the Fund has mobilized $582 million in private finance toward a diverse portfolio of high-impact investment strategies. The Fund added two investments in 2021, bringing total commitments to $18 million of the $30 million fund.
The Zero Gap Fund was launched in 2019 in partnership with the John D. and Catherine T. MacArthur Foundation. It deploys patient, risk-tolerant, and flexible capital into promising, impact-driven financial strategies and mechanisms that seek to boost large-scale private investment in advancing the UN Sustainable Development Goals (SDGs).
“Innovative financial mechanisms like those supported by the Zero Gap Fund demonstrate the power of catalytic capital to cultivate and scale impact-driven investment strategies. With the SDGs being undercut by Covid-19, climate change, and other crises, the need is both critical and urgent for investment solutions that marry impact and return and mobilize significant private capital to such strategies” said Maria Kozloski, Senior Vice President, Innovative Finance, The Rockefeller Foundation. “As the Zero Gap Fund’s portfolio matures, we are seeing encouraging results even in the face of broader instability in the market.”
Zero Gap Fund Impact Highlights:
- LeapFrog provides access to financial services and healthcare for emerging consumers in Sub-Saharan Africa, South Asia, and Southeast Asia. Through its portfolio companies, it has delivered essential healthcare services to 11 million emerging consumers and enabled 50,000 jobs as of 2021, which is up from 17,000 in 2020. Two-thirds of the people reached by LeapFrog’s portfolio are from low and lower-middle income groups.
- The Forest Resilience Bond enables the restoration of forests and assures water quality for farmers and communities threatened by wildfires. It has helped to avert 20,000 megatons of CO2 emissions, funded restoration for 2,000 acres of fire prone areas in California and protected 6,000 acres of terrestrial ecosystems. It is now targeting an additional 25,000 acres for restoration, building on the initial 15,000-acre plan launched in 2019 that is on track to be completed by 2023.
- Sixup provides student loans to high-performing, low-income students in the United States that face a gap in financing their college educations. It has distributed 328 loans to students in 32 states for a total of $3.1M, with an average loan size of $9,000.
- CRAFT finances solutions for climate adaption and resilience to improve the lives of under-served communities globally. Its investment in SOURCE, a solar hydro-panel company, has successfully reduced 16 tons of net GHG emissions, while serving 6,000 beneficiaries in 48 different countries.
- The Women’s Livelihood Bond 2 (WLB2) provides capital and other assistance to women-owned businesses in Southeast Asia. It has directly reached 43,000 women emerging consumers and indirectly benefited another 100,000, which is up from 31,000 women in 2020. Since the Fund invested in WLB2, the WLB series has continued to grow and thrive, mobilizing a total $78 million and empowering over 1 million women across the Asia-Pacific region.
- Founder’s First Capital Partners provides revenue-based financing to underfunded and underrepresented entrepreneurs across the United States. In 2021, the company funded 12 loans with an average size of $175,000, with 65% going to women, 63% to ethnic minorities, and 50% to low or moderate-income communities, and reported a 53% revenue growth per borrower.
- Apis & Heritage enables job preservation and asset ownership for low-income and minority workers in the United States through employee ownership. It announced its first two purchases of companies using an employee-led buyout model, helping 170 workers to build wealth through ownership of the businesses where they work.
The Zero Gap Fund builds on a grant portfolio which has issued nearly 70 grants totaling $38 million to over 50 organizations globally working to develop new impact-driven financing mechanisms. These grants have funded local groups to rebuild coral reefs which protect communities from hurricanes; created a novel asset class that puts monetary value on the environment to incentivize protecting it; and scaled Zambia’s first renewable energy buyer to support a portfolio of up to 110MW of renewable energy in the region.