The Omidyar Network just put $5 million into the Brazilian impact investing fund FIRST. Though Omidyar’s gift isn't the largest investment in the fund—that came from an undisclosed investor who put in $28.5 million—it has helped push FIRST into the position of the largest social impact investing fund in Brazil.
It's a ripe moment to focus attention on Brazil. While the country has managed to cut its population of people living in extreme poverty by 50 percent since the late 1990s, millions of Brazilians are still shockingly poor, and a slumping economy, along with government cuts, have fueled intense unrest lately.
One byproduct of Brazil's progress in recent years is that international development agencies no longer focus much attention on the country. Brazil is simply becoming too developed for them to stay. And so the country is in a tricky limbo: Poverty remains pervasive, but development assistance isn't seen as the answer, and the national government doesn't have the resources it once did.
That sounds like a great setting for impact investments into market-based solutions that can foster businesses, raise people from poverty, and expand the middle class. That's where Omidyar comes in.
The FIRST Fund hasn’t released a long or definitive list of funding parameters. However, it has made clear that it will invest in companies that are providing goods and services that benefit the Brazilian population earning less than $10,000 annually. While big corporations in search of high returns may skip this group, entrepreneurs can actually thrive by meeting the needs of these consumers—and so can their investors.
Pierre Omidyar has long backed market-based models to solve problems, and since establishing the Omidyar Network, he’s been funding along a spectrum of for-profit and not-for-profit approaches to change—depending upon what solutions seems most promising. To the Omidyar Network, it's always seemed obvious that you need this kind of expansive toolbox to address a range a problems, but only lately have many other philanthropists begun migrating to this view in a big way.