How RISE Fund And TPG Are Levelling The Playing Field For Society Through Social Impact Investing

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This conversation and story is all about leveling the playing field for money.

The companies that the Rise fund invests in this space are fostering either financial inclusion or they’re generating financial wellness and in the financial inclusion part of the business. Social impact investing is though quite different from philanthropy as there is an expectation of return on the investment for those accepting capital for their endeavor or business.

One amazing example is Varo Bank:

There are still 1.7 billion people on planet earth who do not have access to what I’ll call formal financial services. They can’t open a bank account. They can’t transact with each other in a digital money format. They can’t obtain what I’ll call a proper loan. You know, they can borrow from a money lender. You know, the person on the street who will lend you at 20% interest a day. So those in that 1.7 billion that are still not properly served by the system one good example in our portfolio is a company called Varo bank, which happens to be the first bank in us that exists completely in the digital world. It’s a digitally native bank and it sought out from the get-go to obtain a full national bank charter, which is very difficult to get in us. It’s the same bank charter that Wells Fargo or Bank of America might have, but the Varo mandate is to go and serve individuals in the United States who are lower-income and for whom getting a checking account at bricks and mortar bank where they need to have a certain minimum of amount of, of deposits to not be levied a $15 monthly fee for someone at a very low income being charged $15 a month, just to have a checking account is very expensive and Varo can offer these kinds of everyday financial services at no cost or much lower cost than bricks and mortar institutions.

Going back to finish college

35 million Americans start college, but for a variety of reasons, are not able to obtain their college degree to finish the four years of college. Rise fund invests in businesses that allow those individuals to get their college degree while they are working with the tuition paid for by their employer. So that’s another example of an impact company, our company in stride, which does this in partnership with Arizona State University that provides the college certification and is implemented by companies like Starbucks that pays for the tuition on behalf of its employee so that they can obtain their college degree and up-a level in their job at Starbucks as a result and generate more income for themselves.

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Levelling the learning space with DreamBox

Rise fund has found that some of the education companies that they invest in, in us are ahead of the game ineffectively discovering solutions if you will, too, to big problems and their knowhow and their intellectual property can export to foreign markets. So let me just take one example, DreamBox, specializes, in the K through eight math learning space. They’ve now expanded to offer products in English and language arts in other areas, but starting with math, the founder of DreamBox effectively built an algorithm that learned the learner as the learner learns. So the fundamental understanding of the founder of DreamBox was that each child learns how to solve or can solve a math problem slightly differently. There’s not just one way to solve a math problem. And yet you have one teacher in a classroom who can only teach one or two methods of solving a math problem. They, that, that teacher can’t teach 10 different approaches to solving that math problem, which is delivered, you know, digitally. So kids can access it through a tablet or the computer will serve up questions to a student and enable that student to get to the right answer, following the logic that is most natural to that student and dream blocks can radically improve learning outcomes for students when it’s implemented. And it’s more fun for students.

When you look at the world around us right now that no one group of individuals can linearly solve us. And that ability to triangulate commercial, social and environmental value is a new formula for capitalism. That is exciting because the traditional tensions of doing good or doing well are, are contradictions to what can happen.

Maya Chorengel is Co-Managing Partner at The Rise Fund where she leads Impact and Financial Services. She has been with TPG since 2017 and is based in San Francisco. Maya has over two decades of private equity, venture capital and impact investing experience globally. Prior to joining TPG, she was a co-Founder of Elevar Equity, a leading impact venture firm, and earlier was with Warburg Pincus in Hong Kong, Menlo Park, and New York. Maya has a BA from Harvard College and an MBA from Harvard Business School. She co-authored “Calculating the Value of Impact Investing” published in the Harvard Business Review. Maya is a Director of TPG Inc., Benevity, Varo Bank, Nithio, SEO, and Kiva and serves on the Advisory Boards of the Harvard Business School Social Enterprise Initiative and CASE i3 at Duke University.