From grants to growth: The journey of IAP almuni's investment

The journey from promising innovation to investment-ready enterprise rarely follows a straight path, especially in emerging markets. Businesses often find themselves trapped in the “missing middle”—too substantial for microfinance yet too small to attract commercial investment. This is where initiatives like the Innovations Against Poverty Challenge Fund (IAP) step in, providing a mix of grant funding and comprehensive support that helps businesses evolve from grant people we work with into investment-ready enterprises.

Recently, we contacted former grantees to gain insight into their post-programme journeys. The response was enlightening—17 businesses across four countries shared their experiences, revealing both impressive achievements and ongoing challenges.

Despite operating in challenging investment landscapes, 65% of survey respondents have secured additional funding since completing the IAP programme, and nearly 20% have pursued investment opportunities.

In total, the 17 enterprises (out of 39 businesses supported to date) have raised an impressive €3.58 million in post IAP support—averaging €325,000 per business. The investments vary from modest amounts of €8,000 to an eye-catching €1 million, reflecting the varied capital needs of inclusive businesses at different stages of growth. Each business tells a unique story.

ChapChap, a Ugandan fintech company, secured equity investment from the Nordic Impact Fund in 2021—a connection facilitated directly through IAP. The company credits SNV’s comprehensive support as instrumental to their investment success, highlighting three key areas:

• Skills development in financial literacy and pitching

• Strategic investor connections

• Enhanced market credibility as an IAP grantee

As ChapChap’s founder shared during an IAP webinar, “We didn't have contacts with whom we could share our journey. IAP made introductions and helped us prepare for engaging in investor discussions.”

With a €73,000 IAP grant complemented by €82,000 of its own investment, this Ethiopian food company dramatically scaled production of its nutritious “Gursha” snack bars from 30kg to 750kg daily. They’ve since secured €627,000 in follow-on financing.

Beyond financial support, IAP helped TruLuv refine its product formula, optimise operations, strengthen corporate governance, and work on a comprehensive rebranding of “TruLuv Granola” to the culturally resonant “Gursha”. This move allowed them to better connect with local consumers.

Husk Ventures (not included in the survey) exemplifies the desired trajectory—evolving from an IAP grant service user in 2017-2018 to securing substantial equity investment of €4.4 million in 2024. Operating in Cambodia’s organic fertiliser sector, Husk has developed an innovative business model that appeals to impact-focused investors. A Husk representative shared at our launch event: “The IAP grant was helpful, but the non-financial support from IAP was just as important to build our internal capacity."

After the IAP support, the social impact reported by former grantees is equally remarkable. Collectively, the 17 survey respondents reached nearly 6 million people living in poverty in 2024 alone—averaging 353,000 people per grantee.

One respondent highlighted the overwhelming market demand: “We increased product demand tremendously. Consumers are looking for the product from day to day; unfortunately, we are not able to deliver and satisfy the demand of all customers. Our product is increasingly getting requested by neighbouring countries.”

While social impact remains impressive, financial growth trajectories paint a picture of dogged resilience. Over half of alumni respondents reported moderate (5-20%) to significant (over 20%) revenue increases since programme completion. In a landscape where startups struggle to survive, these results speak volumes. Only one responding alumnus cited a revenue decrease. At the same time, profitability remains a challenge, and about 29% of respondents report they are not yet profitable—a reminder that the journey to sustainable business models requires patience and persistent support.

Despite these successes, former grantees face ongoing hurdles. Many struggle to find appropriate investors, particularly in sectors perceived as high-risk, such as aquaculture and fintech. Limited access to traditional financing due to a lack of collateral further complicates their expansion plans. One business leader stated, “Securing capital to maintain and grow operations is one of the biggest challenges. There is no financial access from the bank in the country.”

Female entrepreneurs report additional barriers, including limited networking opportunities and gender-based constraints in the investment landscape—highlighting the need for targeted support to address these specific challenges.

In light of these ongoing challenges, IAP is steadfast in its commitment to supporting alumni well beyond the initial grant period. We have recently initiated a challenge for our alumni, selecting eight innovative businesses to receive enhanced investment readiness training and intermediary support. This initiative aims to facilitate a smoother transition from grant funding to commercial investment for more enterprises. Achieving sustainable impact requires more than merely financial input; it calls for a holistic ecosystem approach that effectively addresses the distinct challenges unique to inclusive businesses within emerging markets.