Driving Ecosystem Change: An Interview with Eric Cooperström of the Skoll Foundation

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Over the past 15 years, the Skoll Foundation has been working to drive large-scale change by investing in, connecting, and celebrating social entrepreneurs and innovators advancing solutions to the world’s most pressing problems. The Foundation has been a long-time partner, supporting Root Capital with a combination of grant and debt funding for the past 10 years, and most recently provided a 10-year, $2 million loan that is subordinate to senior noteholders.

We recently had a conversation with Eric Cooperström, principal and head of follow-on investing at the Skoll Foundation, during which he reflected on the Foundation’s evolving support of Root Capital and what excites him about the future of our partnership.

Root Capital: What is the Skoll Foundation’s investment and grant-making strategy? 

Eric Cooperström: The Skoll Foundation’s main focus is supporting social entrepreneurship, which is our chosen vehicle for social and environmental change. Our flagship program is the Skoll Awards for Social Entrepreneurship.

Each year, we select four to six entrepreneurs from around the world whose innovations drive towards large-scale impact and equilibrium or systems change for some of the world’s most pressing problems. We partner with awardees, providing three years of core support and connections to a larger network of other funders and storytelling opportunities to amplify the impact these changemakers can have. Getting Beyond Better, a recent book released by Foundation President Sally Osberg and Roger Martin outlines the Foundation’s theory of change focused on supporting social entrepreneurs to develop, build and scale their solutions to create these transformative and sustainable changes.

RC: Our founder and CEO, Willy Foote, was a Skoll awardee in 2005. Why did the Foundation first choose to support Root Capital and what has motivated the Foundation to continue to support Root Capital for the past 10 years?

EC: The Foundation chose Willy to receive the Skoll Award because he embodied all of the characteristics we look for in a transformative social entrepreneur. We are in the business of trying to solve problems. And Willy was focused on driving a solution, smallholder agricultural finance, to address the large-scale problem of rural poverty. Over the past 10 years, Root Capital has grown its own operations and impact, expanding its organizational know-how, and has always had a core focus to build the industry. It has never been just about Root Capital, but rather about scaling an entire ecosystem of solutions for smallholder farmers.

From the beginning, it was clear that it is in Root Capital’s DNA to be not just a leader but also a collaborator. Root Capital has continually played a dual role, both pushing the boundaries to reach new underserved markets of agricultural enterprises as well as blueprinting and sharing best practices—all with the goal to crowd more funders and service providers into the marketplace. From Root Capital’s leadership in pre-competitive industry alliances like the Council of Smallholder Agricultural Finance (CSAF) to providing key advisory support to the Initiative for Smallholder Finance (ISF) platform that seeks to mobilize additional financing for smallholder farmers, Root Capital’s goal has always been to look beyond the growth and impact of the individual organization. And that is the North Star for us at the Skoll Foundation – to support organizations, like Root Capital, that are driving a larger ecosystem change.

RC: The funding the Foundation has provided has been multifaceted over the years, with a combination of grants and loans. Most recently, the Skoll Foundation has joined as a key investor in our campaign to raise long-term subordinated debt. Over the years, how has the Foundation decided which type of funding to deploy and when?

EC: As a foundation, we are able to be flexible with the type of support we can provide. Root Capital is a unique organization that plays many roles – from lending institution operating in badly broken markets, to technical assistance provider, to market builder. It flows naturally that, in these many guises, Root Capital has required different types of financial support – from philanthropic funding to cover losses in their lending portfolio, to grants to cover the costs of field building activities, to debt to capitalize their loan fund.

The Skoll Foundation has backed Root Capital several times over the years in ways that reflect the organization and market’s particular need and opportunity. We share Willy and Root Capital’s vision and want to support the organization’s achievements and push the boundaries of the smallholder finance market.

Our latest loan comes at a key evolutionary moment for Root Capital as the organization transitions from a less sustainable grant-funded first loss model to a hybrid capital structure that is aimed at providing stability for future growth.

After rolling-over our original 2005 loan to Root Capital in 2009, we subordinated our position with a new five year term. Back then, we saw the value of providing this type of debt and demonstrating repayment. Senior debt holders did not recognize the subordination of our loan as an additional loss layer to leverage further portfolio growth.

In 2012, we provided a significant grant to fill this first loss capital gap to specifically allow Root Capital to build its core lending programs and catalyze the broader market. When our loan matured and was fully repaid in 2015, Root Capital had grown to a $100M lending portfolio, but raising grant-funded equity had become increasingly challenging.

When Root Capital launched a campaign to raise and use subordinated debt to complement their grant-funded equity position, we saw the opportunity to position a new subordinated debt investment with Root Capital’s new reality and underpin its exciting off-balance sheet partnership development. As we support organizations like Root Capital in building a financial market, our goal is to help crowd in more market-based investors and drive Root Capital further towards sustainability.

RC: What advice would you give other investors as they think about their strategies to maximize the impact they can have with their capital? 

EC: Firstly, there is a very unique opportunity to positively impact the world on a large scale by investing in smallholder agricultural finance. There are 500 million smallholder farmers globally who in turn support their families – which equals billions of people who are dependent on this sector.

It is also one of the few investment areas that cuts across a majority of social and environmental impact sectors, from gender to rural livelihoods to food security. Supporting organizations like Root Capital who not only have a direct impact themselves, but more importantly are also collaborating with others to amplify and scale impact, is so much more valuable than any monetary return toward creating powerful, lasting change.


If you would like to learn more about opportunities to support Root Capital, please contact Rachel Serotta, Root Capital’s director of investor relations, at rserotta@rootcapital.org.

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