From Grants to Growth:
The Investment Journey of IAP Alumni
Mind the Gap: Navigating the “Missing Middle”
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 recipients into investment-ready enterprises.
Recently, we reached out to former grantees to understand their post-programme journey. The response was enlightening—17 businesses across four countries shared their experiences, revealing both impressive achievements and ongoing challenges.
“IAP played a crucial role in enhancing our visibility, strengthening our asset base, and expanding our business reach. Their support positioned us as a credible and investable enterprise, making us more attractive to other partners.” Former grantee in Uganda
Securing the Next Round: Post-Grant Investment Success
Despite operating in challenging investment landscapes, 65% of survey respondents have secured additional funding since completing the IAP programme, with nearly 20% currently pursuing investment opportunities.
Collectively, 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 range from modest sums of €8,000 to an eye-catching €1 million, reflecting the diverse capital needs of inclusive businesses at different growth stages. Each business tells a unique story.
ChapChap: Uganda’s Fintech Revolution
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 that we could share our journey with. IAP made introductions and helped us being prepared for how to engage in investor discussions.”
TruLuv Trading: Ethiopia’s Nutritional Powerhouse
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” to better connect with local consumers.
Husk Ventures: Organic Growth in Cambodia
Husk Ventures (not included in the survey) exemplifies the desired trajectory—evolving from IAP grant recipient 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.”
The Numbers Behind the Impact
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.
Reality Check: The Continuing Challenges of Growth-Stage Businesses
Despite these successes, former grantees face ongoing hurdles. Many struggle to find appropriate investors, particularly in sectors perceived as high-risk as aquaculture and fintech. Limited access to traditional financing due to lack of collateral further complicates their expansion plans. As one business leader candidly 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.”
Building an Ecosystem for Long-Term Success
Recognising these persistent challenges, IAP remains committed to supporting alumni beyond the initial grant period. The project recently launched a challenge among alumni, selecting eight businesses to receive further investment readiness and intermediation support to help more businesses on their journey from grant funding to commercial investment. The path to sustainable impact requires more than just financial resources. It demands a comprehensive ecosystem approach that addresses the unique challenges faced by inclusive businesses in emerging markets.