Next Billion Announces the First Closing of its Digital Growth Fund

Next Billion Capital Partners (“Next Billion”), an impact private investment manager, announces the first closing of Next Billion Digital Growth I (the “Fund”).

 

The Fund has attracted institutional investors from the United States and Europe, such as Impact Engine, Capricorn Investment Group, and responsAbility Investments AG, who view the Fund as a way to access technology investments and drive financial and digital inclusion in high-growth economies. The Fund is expected to have subsequent closings in 2024 from additional investors including fund-of-funds, corporates, family offices, and development finance institutions (DFIs).

Driving financial and digital inclusion in emerging markets

Next Billion Digital Growth I will invest growth equity into local companies that are scaling rapidly and leveraging technology to provide essential services – including fintech, insurtech, healthtech, and edtech companies – across nine large markets in Southeast Asia, Middle East & Africa, and Latin America.

The Fund plans to invest $10-15 million each in 15-20 local digital market leaders who need capital to continue scaling. Through these investments, the Fund aims to positively impact the lives of three target beneficiaries: women, as earners and consumers; low-and-middle income households; and underserved micro, small, and medium enterprises (MSMEs) – together, the “Next Billion” users of technology products who will shape the global digital economy.

 
“We are honored to receive the backing of an incredible group of limited partners in the first closing of Digital Growth I,” said Ruzgar Barisik, one of the Fund’s Managing Partners. “The support of top-tier impact-focused investors validates our belief that technology can uniquely drive impact at scale and allows us to focus on our mission of scaling this next generation of digital leaders that will drive transformative growth in emerging markets.”
 

The Fund will be managed by a team of investment professionals who combined have over 50 years of private equity experience in emerging markets. Says Managing Partner Ken Toyoda, “We are deeply rooted in the markets where we invest and are here to stay across cycles. The current environment – reduced levels of capital deployment and 10-year low valuations, against a backdrop of rapid digitalization in emerging markets – represents a generational opportunity to deliver outsize financial returns and impact.”

 
Impact Engine’s Partner and CIO Priya Parrish echoes this sentiment: “There continue to be strong growth opportunities in emerging economies even if markets are currently muted. We invested in Next Billion because of their extensive experience investing in these economies with boots on the ground. Growth equity is an attractive strategy in this environment and the Fund’s diversification across several countries gives us the ability to manage risks and capture upside.”
 
The Fund has already made its first investment in Qoala, a leading insurtech in Southeast Asia: after its initial investment in 2023, the Fund followed on in the recently announced growth equity round led by Paypal Ventures and MassMutual. With less than 2% penetration, Southeast Asia is among the most underinsured regions in the world. As Barisik explains, “We believe that Qoala’s approach of working with agents, supplying digital tools, and enabling them to sell more (and better) insurance products positions them well to scale in the region.”
 
Commitment to 2X Challenge
 

The Fund is committed to gender investing. While investing to improve the financial health of households and MSMEs, the Fund will put particular emphasis on companies that support entrepreneurship and leadership by women, create skilled employment for women, and scale products or services that have an outsize benefit on women. Next Billion expects that over 60% of the Fund’s portfolio companies will meet the 2X Criteria; this is double the threshold for an investment fund to qualify for the 2X Challenge. In addition, Next Billion commits to promote gender balance at the fund manager and create a culture that values diversity and inclusion.

About Next Billion Capital Partners

Next Billion Capital Partners invests in companies that drive inclusive and sustainable growth in emerging markets. The founding team of Ruzgar Barisik, Ken Toyoda, and Falgu Shah met at the World Bank / International Finance Corporation (IFC), where they helped build the technology investment practice; along with Christopher Schroeder, they launched Next Billion in 2019 to catalyze the next generation of transformative companies in emerging markets. Next Billion Digital Growth Fund is the firm’s latest investment vehicle, investing in growth-stage companies enabling financial and digital inclusion in Southeast Asia, Middle East & Africa, and Latin America.

 

Press Enquiries:

Ruzgar Barisik & Ken Toyoda, Managing Partners