In light of the global pandemic, we are launching the MIT D-Lab Scale-Ups Covid-19 Bridge Fund to support D-Lab Scale-ups fellows who are pioneering innovative solutions in low-income markets – entrepreneurs who, through their work, over eight years, have reached over 2.5 million people in Africa, South Asia, and Latin America. All past and current fellows will be eligible to receive a grant between $2,000 and $8,000 based on demonstration of need and their response plans to coronavirus disruptions. The goal of this fund is to help them develop new strategies, access additional support, and maintain their impact through the coming months.
Jona Repishti is the Social Entrepreneurship Manager at MIT D-Lab and manages the Scale-Ups Fellowship. Recently, she shared her thoughts and reflections about what this pandemic means for the Scale-Ups fellows.
How has COVID-19 impacted Scale-Ups Fellows and their businesses?
The D-Lab Scale-ups fellows are a battle-tested bunch - they have set up business and serve customers in some of the riskier and more volatile markets in the world. Nevertheless, the Covid-19 pandemic and the ensuing economic crisis are unprecedented, testing the resilience of entire industries. We have been in close touch with our entrepreneurs, and we are learning that the challenges that they are facing are fast-coming, sticky, and multifold.
Lockdowns, coupled with travel restrictions and social distancing measures, are affecting D-Lab supported social ventures in every sector. All entrepreneurs with whom we have spoken report acute disruptions in their supply chains, manufacturing processes, distribution channels, and point-of-sale systems. As we launch the Scale-Ups Covid-19 Bridge Fund, most of our fellows are scrambling to figure out basics, such as how to make their products and how to sell to customers who are now just out of their reach.
Additionally, most of these founders have had to shift their entire teams to online work, often in areas of poor connectivity and low bandwidth. They now must lead, inspire, and make difficult decisions as they personally struggle to adjust to the drop-in business activity and the new remote work environment.
Finally, some entrepreneurs are starting to realize that the product-market fit that they had diligently pursued over the last few years may have disappeared overnight. This means that when Covid-19 restrictions lift, a new reality will emerge. They cannot count on going back to business as usual. With the pandemic, their target customer’s pain points, priorities, and behaviors may have been nudged in new directions, so the basic building blocks of their business models may need to be reshaped to meet these evolving needs.
Their survival is at risk at a time when the people they serve need them more than ever. Our fellows are pillars in their communities, providing over 700 direct jobs, 8,500 indirect jobs, and reaching 2.25 million beneficiaries with essential goods and services in areas like energy, water, education, healthcare, and housing. The tasks facing these entrepreneurs are daunting, but I am inspired to see how they have been quick to protect their teams and maintain their impact on the ground.
How is MIT D-Lab supporting Scale-Ups Fellows during the crisis?
In today's challenging environment, access to quick and affordable capital can make the difference between enterprises shutting down operations or keeping their doors open for business. For this reason, our number-one priority is providing capital of up to $8,000 to our fellows as fast as possible. These unrestricted grants can be used immediately to pay wages, keep operations going, and experiment with new approaches.
The Bridge Fund, however, is only part of our response. From our past work with entrepreneurs, we have learned that cash alone is never enough to make a difference. For this reason, we have developed a compilation of tips on how to weather the crisis and build business model resiliency. Our Covid-19 Guide for Social Enterprise in Emerging Markets, drafted in collaboration with Therese Klasson-Chenat, will first be shared with our fellows, then disseminated more broadly through D-Lab networks and partner channels. Finally, Scale-Ups affiliate Sagar Tandon will provide fundraising support and advice to four to five selected fellows over the next few months.
We hope that through these efforts we will help our fellows focus beyond the immediate crisis and plan creatively and proactively on the future.
What are some of the ways that Scale-Ups Fellows are already responding to the crisis?
Right now I am seeing a lot of coronavirus-induced ingenuity from our fellows. Here are three of their stories.
Developing new sales channels: Before Covid-19, True Moringa, a hair and skincare brand, earned almost 90 percent of its revenue from exports and sales in physical stores in Ghana. With the pandemic came border closures and city lockdowns, and the retail income quickly disappeared. Rather than give up, Kwami Williams and his team pulled off their fastest sprint ever: they built an online store in 15 days, setting up warehousing and fulfillment for products not just for themselves, but also from 16 Ghana-made brands. Together they launched Thrive Together, an online platform with a mission to serve customers in Ghana, support Ghanaian companies, and donate to charities fighting Covid-19.
Doubling down on impact: MiBosillo, a venture whose mobile app promotes digital financial identity for un/underbanked users, decided to change its business model and give away one million accounts to private and public institutions that work with individuals or micro/small businesses in Latin America for free in the next six months. By focusing on expanding access to its digital financial management platform and by working alongside like-minded partners across multiple countries, the MiBolsillo founder Julio Lavalle hopes to accelerate the rebuilding of the economy, especially for the most affected and marginalized by Covid-19.
Developing new products for new customers: EcoAct, a social venture in Tanzania, has been working to transform post-consumer waste plastics, packaging materials, and agricultural waste into durable and environmentally friendly plastic lumber. When fits main customer base, eco-friendly tourism lodges, and companies, shuttered, founder Christian Mwijage decided to pivot his venture offering to the agriculture and food industry. EcoAct is now repurposing the timber for greenhouse construction, prototyping plastic pallets to replace wooden ones for use in food warehouses, as plastic frames are cheaper, eco-friendly, and last longer.
What will Covid-19 mean for social entrepreneurship?
Covid-19 is an evolving crisis and I think we are still all grappling to understand the shifting landscape and the role that each of us has to play within it. I believe in the old adage which says that disruption and opportunity often go hand in hand. Over the last eight years, D-Lab has worked alongside entrepreneurs, partners and community members to innovate solutions in spaces with scarce resources. Drawing upon this expertise, we hope to continue to leverage our team to support COVID-19 innovation and continue to learn from our fellow’s efforts well into recovery. More than ever, it is important that we convene as a community to share our insights, talk about the challenges everyone is facing, and curate advice that is helpful in navigating this crisis. Only by coming together, we can flip this from an extinction event into an opportunity to develop more resilient businesses and more inclusive economies.
Fundraising to increase the impact of the fund is ongoing. To learn more about the Scale-Ups Covid-19 Bridge Fund, please contact Jona Repishti.