Vietnam-based Beacon Fund is Southeast Asia’s first private debt fund dedicated to promoting gender equality and positive social impact.
Beacon Fund was created to shine a light on alternative models of entrepreneurial and investing success. Rather than changing women-owned businesses to fit the system, beacon believes it can change the system to better meet the needs of female entrepreneurs.
In particular, it seeks to support moderate-growth companies that are currently sidelined by traditional venture capital and private equity firms. These companies have often not raised large amounts of outside capital but rather grown organically over time.
While some may be dismissive of these SMEs as ‘lifestyle’ or ‘micro-businesses’, the Fund’s experience from 10+ years of engaging with entrepreneurs in Southeast Asia has revealed that many of these businesses are in fact profitable, cash-flow positive businesses growing at healthy rates.
Because of challenges raising funding from outside investors — due to a wide number of factors, including gender bias, access to collateral — women gravitate to businesses with healthy unit economics where profits can be channelled back into organic growth.
Shuyin Tang, co-founder of the Beacon Fund explained that while impact investing is at a nascent stage in Vietnam, there have been some recent new developments.
A decade ago, both impact investing and environmental, social, and governance (ESG) were extremely new concepts in Vietnam. Over the past 10 years, ESG has gained prominence in the country, but impact investing is still unfamiliar for many.
Beacon Fund’s new investments
This year, Beacon Fund became more active with three investments: Lotus Group, HSVG and CAS.
Beacon Fund and Vietnam’s Lotus Group have unveiled a substantial collaboration, committing millions of dollars to bolster the expansion and development of Lotus Group’s food and beverages arm. Lotus Group recorded an impressive growth of over 20% in 2023, marked by the inauguration of five new restaurants, thus elevating its total outlets to 28. Lotus Group underscores its commitment to gender diversity, with over half of its nearly 1,000-strong workforce made up of women.
Beacon Fund has invested in Hoa Sen Viet Group (HSVG), one of the largest multi-brand beauty retailers in Vietnam. HSVG was one of the first companies to bring high-quality foreign skincare products to Vietnam. Aspiring to develop more comprehensive health and beauty solutions for Vietnamese women, the firm launched the multi-brand concept Beauty Box in 2018, aiming to be the Vietnamese equivalent of Sephora or Ulta, two of the top beauty retailers in the United States.
Beacon Fund and CAS Energy reached an initial investment agreement in April to advance renewable energy projects integrated with circular agriculture under the climate-smart agriculture model in Vietnam. CAS stands at the forefront of renewable energy and climate-smart agriculture in Vietnam. CAS Energy will leverage this investment to develop rooftop solar projects coupled with climate-smart agriculture, supporting Vietnam’s renewable energy and sustainable agriculture objectives.
A movement to increase financing to women
Beacon Fund is part of the larger global movement that is spearheaded by the 2X Challenge to increase financing to women.
The 2X Challenge is a commitment by G7 Development Finance Institutions (DFIs) to collectively mobilise private sector investments in developing country markets to provide women with improved access to opportunities that enhance economic participation and access. The flagship initiative has so far raised gender lens investments totaling US$33.6 billion.
For more on Beacon Fund see: https://beaconfund.com/