JPMorgan chase joins UK Government’s DFID and CDC to announce $20 million combined investment in Novastar Ventures
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Capital Commitment to support Early-Stage Businesses in East African Communities
LONDON, 7 April 2014 – JPMorgan Chase and the UK Department for International Development will kick start promising businesses in East Africa through a new joint investment in Novastar Ventures.
The new $5 million investment by JPMorgan Chase will be matched by an additional $15 million from DFID as part of its first ever Impact Investment Fund. Launched in 2013, the fund is managed by the CDC, the UK’s own Development Finance Institution.
The investment will develop and grow early-stage businesses that bring the most basic human needs to some of the poorest communities in East Africa, such as healthcare, energy, housing, education and sanitation. The announcement follows Novastar’s recent investment in Bridge International Academies, which provides affordable, primary education to low-income populations. Since 2009, Bridge has built more than 250 schools in Kenya and has hired over 3,000 employees from some of Kenya’s poorest communities.
“We are delighted to have Novastar join our latest investment round,” said Jay Kimmelman, Cofounder and CEO of Bridge International Academies. “Novastar’s founding partners have supported Bridge since our very early days. Their values are closely tied with ours – seeking innovative business-based solutions to sustainably solve some of the world’s greatest problems. Their investment and their experience will be invaluable as we enter our next phase of expansion.”
Novastar’s investment portfolio is diverse and includes rapidly growing businesses supplying fuel-efficient cookstoves in Kenya and Ethiopia, and franchise sanitation facilities in Nairobi’s urban slums. Novastar seeks to develop fully commercial businesses that adapt and deploy innovative business models to profitably serve proven demand for basic goods and services, improving access, affordability and quality. Novastar’s investments are expected to benefit more than 2 million low-income households in East Africa over the next decade.
“We’re looking for the next generation of exceptional entrepreneurs who are designing and executing innovative business models to profitably serve low-income consumer markets in East Africa,” said Steve Beck, Managing Director of Novastar. “By supporting these entrepreneurs and the growth of their ventures, we aim to generate long-term capital appreciation for our investors and significant, scalable benefits to these consumers and producers. In so doing, we hope to attract more entrepreneurship andprivate capital into the emerging economies of East Africa.”
The investment follows DFID’s appointment of Novastar as the first beneficiary of its Impact Investment Fund in January 2014. The UK’s £75 million Impact Fund is expected to benefit five million people over the next thirteen years, by providing capital to fund innovative enterprises that serve the poor as employees, producers and consumers.
“Our joint investment will ensure promising businesses get the support they need to create jobs and deliver much needed services like health and education,” said Justine Greening, Secretary of State for
International Development. “Sharing our joint knowledge and expertise on development and sound investment choices will improve the lives of many of the poorest people across East Africa.”
“Impact investments have the potential to transform the lives of millions of the poorest people in Africa and South Asia,” said Diana Noble, CDC’s Chief Executive. “Novastar will now be able to provide earlystage funding to businesses in East Africa that provide vital jobs, goods and services. When CDC commits its capital to impact investment, we’re looking for teams, like Novastar, who are able to raise money from other commercial investors.”
“We are very proud to partner with the UK Government in providing investment to Novastar and the critically important businesses they support in East Africa,” said Peter L. Scher, Executive Vice President and head of Corporate Responsibility at JPMorgan Chase. “Our firm has made a substantial commitment to supporting market-driven solutions to some of the world’s most pressing social, economic and environmental challenges. Novastar’s management team has an accomplished record of financing startups that seek to improve the basic quality of life for people in East African communities. We’re thrilled that our investment can help expand their efforts.”
The investment in Novastar is further demonstration of JPMorgan Chase’s dedication to building and delivering innovative solutions to address social and environmental challenges in partnership with
governmental and philanthropic organizations. Late last year JPMorgan Chase and the Bill & Melinda Gates Foundation announced a new $108 million investment fund to advance late-stage global health technologies, like vaccines, in low-income countries. Since its launch in 2007, JPMorgan Chase has committed more than $50 million in capital to a number of funds making investments in Africa and other parts of the world including the African Agricultural Capital Fund, LeapFrog Financial Inclusion Funds I and II, and MicroVest II.
Notes to editors
1. Case-studies and supporting images of previous Novastar investments available on request.
2. JPMorgan Chase’s $5 million investment brings total private sector funding to $10 million in Novastar, boosted by $15 million in investment from DFID.
3. The US$15 million allocation from the UK Government is taken from DFID’s £75 million impact investment fund managed by the CDC. DFID’s Impact Programme aims to foster the development of the impact investment market in Sub-Saharan Africa and South Asia and to attract new investors into it by:
• Testing and demonstrating the development impact and financial viability of this type of investment
• Improving the way that social impact is measured and information about it is shared
• Providing capital and specialist advice on a competitive basis to enable impact investment managers to raise more capital and deploy it more effectively.
• DFID is providing up to £165 million over 13 years (2012/13 to 2025/26) to catalyse the market for impact investment in Sub-Saharan Africa and South Asia. The programme is coordinated by a Programme Coordination Unit (PCU), which has been commercially tendered to PricewaterhouseCoopers LLP (PwC), working in partnership with CDC and the Global Impact Investing Network (GIIN). http://www.theimpactprogramme.org.uk/
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About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
The UK’s Department for International Development leads the British Government’s fight against world poverty. Find out more at www.gov.uk/dfid
CDC is the UK government-owned development finance institution that uses its own balance sheet to invest in the developing countries of Africa and South Asia. It has net assets of £2.8bn. CDC’s mission is to support the building of businesses in Africa and South Asia, creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places. Under its strategy, announced in September 2012, CDC provides debt and direct investment to businesses as well as acting as a fund-of-funds investor. CDC now only makes new investment commitments in Africa and South Asia
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