As Ecuador announces the election of a new government that promises a substantial transition to a free market economy, the South American nation is already nearly a decade ahead of developing an ecosystem for social entrepreneurship.
The main agent of change in the country is the private company IMPAQTO – the first listed B company in Ecuador which is among the top 100 B companies in the world. One of the three women founders and CEOs of IMPAQTO was born in Quito Michelle Arevalo-Carpenter – Lawyer specializing in human rights, impact investor, ecosystem builder and incubator of social entrepreneurs.
Over the past eight years, the company has forged, developed methodologies and scaled the social entrepreneurship movement. However, it was an unorthodox start. Together with co-founder Daniela Peralvo, they created the first ephemeral collaborative workspace in Ecuador, driven by the need to develop effective communities and tackle the loneliness of innovators. It quickly grew into a strong networking community with monthly meetups.
The demand exceeded the meetings every four weeks, IMPAQTO has therefore developed a first business model opening a permanent co-working space for this community. A third partner, Carolina Brito, joined the team as the network expanded to five locations in three cities.
“Coworking spaces have captured a cult following because we’ve reached out to a wide range of social entrepreneurs. For example, we supported an amazing couple who worked with Panama hats – which are made in Ecuador, not Panama. This couple saw that the art of hat weaving was being lost, and they wanted to collaborate with the weavers and they sold hats to people like Steven Spielberg. They had a great business model and a huge impact on their community, ”says Michelle.
A stream of interesting, socially conscious and ethical operators has poured in. It included guayusa tea producers, water resource innovators, and artisan shoemakers. The community has grown rapidly in the coworking space.
Growth of socially conscious businesses
IMPAQTO then set out to resolve what they saw as a lack of understanding between creative social enterprises and business minds. Instinctively, they developed a series of open exchanges, Collaborators, where the business educated business types on connecting with community leaders – both culturally and commercially. The meetings created the collective idea that it is possible to build a business that thrives financially, improves communities and saves the planet. Hundreds of participants gained value through skills exchanges and shared knowledge.
Recent MBA graduates have learned about gender perspectives and climate change. “Participants also come from the social world, like me, to learn how to do financial projection, pricing and marketing,” Michelle said.
Through the pairing of unlikely allies, IMPAQTO Lab was launched as a business accelerator involving a four-month program. He has graduated over 230 companies which have now raised over $ 10 million in investment. Subsequent monitoring of these companies indicates that the lives of over 2.3 million people in the Andean region have benefited from the work of program alumni.
The lab has been endorsed by Google for startups and has secured financial support from the Inter-American Development Bank to make it available in seven Latin American countries.
As a groundbreaking project, IMPAQTO set out to recruit multinational companies, large NGOs and US agencies as partners of entrepreneurs driven by the program.
A new direction
Pioneering the country’s first B Corporation, building ecosystems that nurture social entrepreneurs and weaving a business system that includes impact investors and global corporations, is a world far removed from Michelle’s familiar original expectations. She was to join the family engineering business.
When it deviated from the expected path, it adopted human rights law. She received an MA from the University of Oxford and a postgraduate degree from the University of California – Berkeley.
“When I returned to Ecuador eight years ago, I saw the immense potential of innovative companies that were active in socially beneficial projects, but working alone. Daniela Peralvo and I created IMPAQTO to create a space for these people to meet, collaborate and create a new center of gravity where doing good is good business in global trade.
Recognition for sustainable growth
Global companies and international NGOs quickly recognized the value of IMPAQTO’s effectiveness and engaged the group to help them navigate the world of social innovation. The Ecuadorian power plant has organized events and summits for various clients around the ethical future of food, leveraging technology for women’s rights and showcasing the regenerative economy.
Influential organizations such as UNICEF, Google for startups, DHL and a range of Fortune 500 companies are now working with IMPAQTO.
Michelle dismisses the idea that big business is necessarily bad for the planet.
“Let’s take a look at the gluten-free pancake mix that is helping quinoa farmers lift themselves out of poverty. They have to sell their product. I want to put the creator in touch with the CEO of Nestlé. Entrepreneurs show the way of the future. In the future, people want to eat organic and know that they are doing good for the community. Multinationals understand distribution channels, marketing and pricing. “
When the networking sessions reached their peak, IMPAQTO created methodologies to connect these two worlds. These contracts have created a new source of revenue for the consulting firm, where they host hackathons, industry-specific accelerators, and public innovation challenges.
Companies that have graduated through IMPAQTO include Waco Water Intelligence, to reduce drinking water waste and improve efficiency; Poliestudios, which provides distance higher education to more than 600,000 students in remote villages in six countries; and J3M, a climate change mitigation company linked to renewable energies.
Slow fashion company Allpamamas goes global through the physical and online sale of handcrafted textiles in remote villages, and Crick Superfood makes crushed protein products from crickets raised on environmentally controlled farms that protect biosecurity.
New impact trends
IMPAQTO’s most recent activity is impact investing to encourage local funders to invest in their own countries rather than going primarily to venture capitalists from the United States, Canada and the United States. ‘Europe. “We launched this year because we have the right team and the right mindset with Justin Schwartz as associate director of the fund.”
“Impact investing is financial support for businesses that improve the lives of South Americans. It supports underrated founders and companies that improve the lives of farm workers; indigenous peoples, it protects habitats and regenerates and conserves forests. These are ethical activities. Our target for this first local impact investment fund is $ 2 million, ”Michelle added,“ but we expect it will mobilize millions more to the region. “
IMPAQTO’s leadership pushes the boundaries of society, first by being led by women and now offering their spaces and support to the causes that are dear to them. This year, the team co-hosted a virtual summit to advocate for reproductive rights through technological innovation, new media and journalism in Latin America. The proposal was ambitious: to unite blue-haired geeks – who are often shy introverts – with outspoken feminists, vloggers and podcasters.
“These disparate groups need to come together because, as a united front, they can change the world. They could reduce teenage pregnancy and change sexual violence. It’s a very cool job that we have, ”says Michelle.
When a for-profit, female-run business like IMPAQTO drives change in a market and aims to sustain an entire country, it gets attention.