The Rise Fund, was founded in 2016 by the Texas Pacific Group (TPG) in partnership with Bono and Jeff Skoll, the growth investing platform of Private Equity giant, raised $2 billion in a single venture fund and was announced on October 4, 2017. Initially, there were many skeptical about whether impact investing at such a large scale could be successful, but after more than three years the fund it’s been and outstanding initiative.
In this article we will run you through the inspiration for Rise, its founders and partners and some of the companies currently in its portfolio.
TPG Growth was founded in 2007 to specialize in growth equity and middle-market buyout opportunities, across the U.S., Europe, Africa, and Asia. TPG Growth currently manages approximately $91 billion in assets across a variety of sectors, inter alia, financial services, healthcare, internet & digital media, natural resources & energy.
Where did The Rise Fund come from?
The Rise Fund was born out of TPG Growths outstandingly successful investment in Apollo Towers, Indian mobile phone tower company which helped the country progress from zero cell phone penetration to roughly 70 percent, which has subsequently increased GDP by 5 percent whilst simultaneously doubling the value of TPG’s initial investment.
Who is involved?
There are a number of well-known investors/philanthropists on the board including Bono, eBay founder Pierre Omidyar, Jeff Skoll, the first president of eBay, Laurene Powell Jobs, Richard Branson, Reid Hoffman, Mellody Hobson, president of Ariel Investments, philanthropist Lynne Benioff, and investor Mo Ibrahim. The idea of having such big names being that they both market the fund and sway investors.
May 2018 saw The Rise Fund’s first investment in Africa; a purchase of a stake in digital payments provider Cellulant worth $47.5 million, making it the largest recorded deal involving a FinTech company which trades exclusively in Africa. Cellulant, founded in 2004 operates in 11 countries and works with 94 banks and mobile money platforms that have a combined customer base of over 130 million. It has the potential so be an extremely successful venture; in an interview with The Financial Times, Cellulant co-founder Ken Njoroge said; “the payment market on the continent is [worth] anywhere between $20bn and $40bn over the next couple of years while all of the FinTech players in the market [currently] collectively generate a little shy of $2bn.”
March 2021 Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, announces the signing of an agreement under which The Rise Fund, will invest $200 million in Airtel Mobile Commerce BV (“AMC BV”), a wholly owned subsidiary of Airtel Africa plc (the “Transaction”).
TPG Growth and Rise Fund head Bill McGlashan has cited that “India is our priority; 400 million of the world’s unbanked people live in India. In healthcare, 65% of the population does not have access to sanitation; India has 65 million diabetics; farmers in India grow 46% less rice per acre than their counterparts in China; literacy lags by 20% and teacher absenteeism rate can be as high as 40%. Meanwhile, you have some of the most extraordinary talent in the world; 70% of the population now has access to mobile connection and smartphone adoption will increase 400% over the next years.” These factors represent a huge growth opportunity; McKinsey & Co. has published a report stating that impact investing in India has the potential to grow from $1 billion to $6-8 billion between 2015 and 2025.
Investor interest comes not only because of the fund high profile and successful investment record, but also due to their valuation methods when measuring social impact and financial return; TPG created a complicated system with partners like the Bridgespan Group, a non-profit consultancy, and KPMG to incorporate what the firm said were hundreds of academic studies.
The Rise Fund continues to fund extremely important projects worldwide, in the last three year the found has investment in 30 companies that are driving measurable social and environmental impact alongside business performance and strong returns.