Tina Ruchti remembers her first investment “scouting tour” in Latin America after joining Switzerland-based Elea Foundation eight years ago.
“We’d travel for two to three weeks to a certain region and try to talk to everyone, to get as much pipeline as possible, and understand the ecosystem,” she recalled.
It wasn’t ideal.
“Investing in Latin America out of Switzerland was really hard,” she told ImpactAlpha at the recent FLII conference in Mérida, Mexico. “It was clear that if we really wanted to be a significant player in Latin America, we needed to be on the ground.”
Ruchti moved to Mexico City in 2023 to open Elea’s second international office (its first was in Johannesburg). The organization has provided catalytic, early-stage equity and convertible notes to a half-dozen ventures in the region. One, Toroto, helps develop carbon and water projects on Mexico’s communal lands, or ejidos.
Investment evolution
The 20-year-old foundation’s development of a ground strategy tracks with its evolution from traditional philanthropy to impact investing. Elea, started by former UBS CEO Peter Wuffli and his wife Susanne, invests early in “entrepreneurial solutions” in climate, agriculture, retail and basic services in Africa, Asia and Latin America.
“The founder’s conviction was that if you want to make impact sustainable in the long term, it needs to be entrepreneurial,” said Ruchti.
The foundation began writing equity checks that could help startups get to seed and Series A investments.
When it signed its first deal in Latin America more than seven years ago, Ruchti said, “there were almost no impact-first equity investors” in the region. Philanthropic and other impact-first investors tend toward debt and revenue-based financing.
Elea has navigated the process for making mission-aligned equity investments under Swiss law. Foundations in other jurisdictions are making similar progress.
“You see more capital coming in as impact-first equity,” she said. “I think that’s a good trend.”
Check out the rest of ImpactAlpha’s video interview series from the FLII:
- Daniel Izzo of Vox Capital discusses the firm’s evolving strategy to invest in sustainable agriculture and natural ecosystem restoration in Brazil.
- Michelle Arévalo-Carpenter and Justin Schwartz of Impaqto Capital discuss the risks and rewards of investing for impact in South America’s smaller markets.
- Miguel Vallo of Impact Ventures PSM, part of Promotora Mexico, shares his perspective on the evolution of impact capital – and LP interest – in Latin America.
- Hans-Christian Lauer shares why he decided to quit options trading in Chicago to start Zenani Capital, an early-stage venture fund for Latin American startups.
