How to seek int’l funding for a social enterprise
VACCINE company Glovax became a social enterprise without even knowing that it has become one.
It started with a couple’s vision to vaccinate Filipinos who live in far-flung areas.
Giovanni DC. Alingog, a certified public accountant, wanted to provide the “last-mile distribution” of vaccines in areas where vaccines were almost unheard of.
His wife, Geraldine, is a pediatrician who tended to patients whose illnesses were easily preventable.
He thought that by increasing the rate of vaccination in the country, they could save more lives.
To bring this idea to fruition, Alingog then sold most of the appliances he and his wife received as wedding presents. He was able to collect P80,000 in the process.
With the amount as startup capital, the couple started the company in 2003 that is now known as Glovax Biotech Corp.
Today, Glovax imports, distributes and retails a complete line of vaccines at affordable prices. It aims to improve the access of middle- to low-income Filipinos to vaccines.
Alingog had only one goal, which is to increase immunization coverage in the country through awareness, accessibility and affordability of vaccines.
To preserve the vaccines, Alingog set up a cold-chain facility that enabled doctors to distribute vaccines to as far as North Luzon. Twelve years later, Alingog’s Glovax has already provided 133,000 free vaccines.
The company has three clinics, 10 retail distribution centers across Manila, and has also administered four million vaccine doses nationwide.
“Our research shows that only a million get vaccinated every year. But most Filipinos spend almost P30,000 for a smartphone. A vaccine is a whole lot cheaper compared to gadgets. In other countries, an average of 15 percent get vaccinated every year,” he said.
To achieve these goals, Alingog is aware that he needs to beef up his funding.
He heard that there were investment firms who were more than willing to lend their expertise in growing equity for social enterprises like Glovax.
By some stroke of luck, Global investment firms such as Kohlberg Kravis Roberts (KKR), Impact Investment Exchange (IIX) and Impact Investment Shujog responded to his e-mail inquiries.
It turned out that these organizations were also searching for companies such as Glovax that they can lend to.
But these organizations implement a comprehensive process to filter only the worthy and credible social enterprises.
The company must first meet the key definitions of a social enterprise. It should, among others, be able to incorporate environmental, social and governance metrics and analysis into investment decisions and management.
In 2014, Glovax partnered with these investment firm giants to gain leverage on operational expertise and in-depth social analysis on the dearth of vaccines in the Philippines.
Steve R. Okun, director of KKR’s public affairs in the Asia Pacific, said he knew that what Glovax was doing was not easy.
“There are problems to solve. We, as an investment firm, can help find ways to address the many pressing concerns of the pharmaceutical and healthcare aspects here. We can lend our skills. This is part of who we are as a firm. As part of this interest, our firm has created a meaningful partnership with IIX and Shujog to offer technical assistance to social enterprises in need,” he said.
In 2014, KKR sent a three-person team composed of investment professionals to provide financial, operational and analytical expertise to better position Glovax for third-party funding commitments.
The team conducted site visits and helped Glovax develop business and financial plans and impact assessment to survey the vaccine sector’s competitive landscape.
“For our part, Shujog created a framework to assess the benefit of Glovax’s vaccines and services delivered to communities. This is our way of giving back to communities as investment bankers. The millennials in our firm are keen to cast a wider net of social impact in the industry,” said B. James Soukamneuth, associate director for research and programs.
After putting the business plan in motion, Glovax received a $1-million credit line from BDO Universal Bank. This will increase the number of vaccines for distribution to 500,000.
In addition, Glovax will be able to hire 10 additional staff members to jumpstart the company’s goals.
Next, Glovax will focus on inventory for its distribution business to meet the next goal of providing 3.5 million vaccines by 2018.
Also in the pipeline is the construction of more cold-chain facilities.
The aim is to provide 50,000 vaccines more for free.
The upgrade in equity will also be used to create a technology-based partnership with doctors for distribution of Glovax vaccines.
“We aim to make vaccinations less painful by creating finer, coated needles. [This way], skin penetration will be less painful but still effective,” Alingog said.
