| Geography | North America, Latin America and the Caribbean |
| Sector | Environment, Agriculture |
| Instrument | Debt |
| Deal Size | USD 1.25 million |
| Investor Targeted Impact | Preserve rainforest and provide fair wages for indigenous farmers |
Investor
| Name | RSF Social Finance |
| Investor description | RSF Social Finance (RSF) is a nonprofit financial services organization dedicated to transforming the way the world works with money. Since 1984, RSF has made over USD 250 million in loans to social enterprises working in the areas of food and agriculture, education and the arts, and ecological stewardship. This investment was made through the RSF Social Investment Fund. Capital for the fund comes from approximately 1,200 individuals and organizations that have invested USD 1,000 or more. Of these investors, 90% are individuals and 10% are organizations. RSF also manages a mezzanine fund, program-related investment (PRI) funds, and donor advised funds. |
Investee
| Name | Guayaki Sustainable Rainforest Products |
| Sector | Agriculture; Environment |
| Geography | North America - U.S. (organizational headquarters); South America – Argentina, Brazil, Paraguay |
| Investee business model | Guayaki imports certified organic yerba maté, an all-natural caffeinated tea with health and wellness benefits grown in the Atlantic Rainforest in Argentina, Paraguay, and southern Brazil, for sale in the U.S. The company's business model of "market-driven restoration" harnesses the power of markets to provide financial incentives to restore the rainforest. Guayaki works with indigenous farmer suppliers who cultivate yerba maté tea plants. Tea plants are cultivated underneath native rainforest trees or in areas undergoing native tree reforestation. Guayaki provides the farmers with technical support to create tea plant nurseries, helps manage the tea-growing process with sustainable practices, and ultimately purchases the product. Farmer-suppliers can improve their quality of life through sale of the tea, which generates a reliable income stream. The company's goals are to restore 200,000 acres of the Atlantic Rainforest, create 1,000 fair wage jobs by 2020, and build a business that inspires local communities to be stewards of their land. |
| Motivations for investment | Guayaki is an attractive investment for RSF because it meets RSF's social enterprise criteria, which are: sustainable business practices, equitable and inclusive workforce relations, commitment to local/fair trade communities, and engagement with a stakeholder community. It works in two of three main RSF focus areas – food and agriculture and ecological stewardship.From a financial perspective, Guayaki is well-positioned to grow significantly and generate strong financial returns. Yerba maté is an alternative in the USD 3 billion U.S. stimulant beverage market currently dominated by conventionally grown coffee, tea, and energy drinks. Guayaki brought yerba maté to the ready-to-drink beverage category in 2005, creating a new level of consumer awareness of the product, and in 2009, entered the energy drink market, creating a natural alternative to "energy shot" beverages. |
Investment
| Instrument | Debt |
| Investment size | USD 1.25 million |
| Source of deal | The investment through RSF's Social Investment Fund is the second investment RSF has made in Guayaki. In 2009, the company received growth capital from the RSF Mezzanine Fund, LP. |
| Stage of company at time of investment | Growth |
| Purpose of investment | Guayaki requires investment capital to fund its continuing growth and meet working capital needs. RSF's investment provides a line of credit to finance working capital. |
| Investment impact objectives | Through this investment RSF seeks to support rainforest restoration and fair wage job creation for South American indigenous populations. |
| Social and environmental metrics tracked on investment | RSF Social Finance tracks the social and environmental impact of investee companies by requiring them to obtain a social and environmental performance rating from Global Impact Investment Rating System (GIIRS), which was developed by B Lab and includes reporting on IRIS metrics. See all IRIS metrics built into the GIIRS ratings assessment here. Topics covered in the GIIRS survey include:Accountability: Governance, TransparencyEmployees: Compensation & Benefits, Employee Ownership, Work EnvironmentConsumer: Beneficial Products/ServicesCommunity: Suppliers, Local/Region Specific, Diversity, Charity/ServiceEnvironment: Facilities, Energy Usage, Supply Chain, Manufacturing |