Tesi’s Anton Jantunen doing voluntary work in Nairobi – Making an impact all in a day’s work for a fund investing in social enterprises

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Volunteering with Mercy Corps Ventures’ Social Venture Fund in Nairobi, Kenia left a lasting imprint on Tesi’s investment manager Anton Jantunen. The summertime job he found on LinkedIn has broadened his concept of impactful investment, and he has been surprised by both the strong networks and complex business models of the country’s business climate. In the world of investment, early development and western countries share the same desire to develop and need for financing, but there are different types of investment impact.

One August Friday, Jantunen answers a phone call in the yard of a portfolio company’s detached house in Nairobi, Kenya. A circular saw makes noise in the background.

It takes more than spinning a tale to make an impact

Anton works in a team that provides post-investment support. Companies are given very tangible help in both operative and strategic matters. Ownership includes board work, either as an ordinary board member or as a board observer.

“Typically, we work with the portfolio company’s management and give them help in four areas. First we survey the market and its size. We check the finances from the viewpoint of the data needed in governance as well as in decision-making. Thirdly, we consider unit economics: how products can be profitably priced. The fourth focus relates to impact. That includes performance measurements as well as communications,” explains Anton.

He says the impact that Mercy Corps Ventures makes is examined from many different angles for each investment, and is discussed as an essential component for guiding operations, not as window dressing. “Being impactful needs more than a sentimental story,” he emphasises.

Anton is working over the summer with four companies, three of which are located in Nairobi and one in the Netherlands. Two of them specialise in agricultural technology. One of these develops technology for land surveying and maps farms in poor countries. Land ownership and titling is documented in the process. That eliminates uncertainty and enhances investment credibility, thereby boosting growth in farm productivity.

The other agriculture-focused company develops small insurances that are included in large companies’ fertiliser and seed deliveries to farmers of smallholdings. Consequently, farmers are in a way forced to take out insurance that, because they underestimate its importance, they otherwise would not. When weather insurance – against drought, for instance – is included in deliveries, farm owners buy more, the problem of low productivity is alleviated, and people can lift themselves out of poverty.

Impact measurements are specific to individual companies and focus on aspects that would naturally be measured in that particular business. Companies focusing on agricultural technology, for example, check how many ownership documents have been drawn up and how many smallholders have taken out insurance.

A lot of footwork to get information

Digitalisation has driven development in Kenya in many ways, and people are very willing to adopt new applications. Anton says that mobile payment became possible a decade ago.

“There are dedicated apps for taxis, food couriers and motorcycle taxis. The state is lagging behind companies in this trend, though. Although a visa for Kenya can be obtained online, a lot of footwork is generally needed when dealing with government agencies.

The platform economy on this continent is not so simple. There are platforms, but not all processes can be automated; some things need to be checked in person.

“Business models are more complex than ours. A person trained in a certain field still needs separate training for the job, and a constant eye must be kept on quality. In projects employing young people, for example, it’s best to check by phone that a person who used a platform to commit to a job – as a hairdresser, for example – is actually free to do it.”

A lot of footwork is needed. Anton points out that there are fewer online data resources for companies to utilise than in Finland. For this reason, helping portfolio companies demands more than just interviews with experts. Mercy Corps is highly networked with the global giants in financial administration and consultancy as well as with NGOs. The support these partners provide is very tangible and working practices are communal in nature. The same applies to the in-house work culture of portfolio companies.

The economy, startups and coders’ salaries all growing

“Nairobi is undergoing a boom in construction, and more people are expected to fill the housing stock. This signals confidence in an economic upswing. There are a lot of startups and also plenty of foreigners, many of them under thirty years old and with no family ties. In addition to Kenyans themselves, it’s mostly Americans, Dutch and French people who set up new companies,” reports Anton. His closest colleague is American.

The personnel in startups is a very international mix, as usual nowadays, but otherwise local employees are preferred. Getting a visa can depend on it not being possible to find a local person capable of doing the job.

Apart from Embassy staff, there are very few Finns. A Swedish impact fund co-invests with Mercy Corps Ventures.

Anton believes the supply of financing is adequate, but companies have problems finding a good workforce. In particular, people competent in financial administration and – also here – programming are in short supply. Labour is cheap in the work that needs doing, and Saturday is a normal workday. But the salaries of managers and sought-after programmers can rise to higher than their equivalents in Finland.

Making an impact requires money and benefits society

The world of financing has been characterised in the Finnish media as a sector in which “much of the work is known to be an endless zero-sum game that in no way benefits society”. Anton disagrees.

“In the west, the conventional aim of financing is to enhance an already high level of wellbeing. Impact investing does not necessarily produce higher returns, but achieves something real and of greater importance. The money can have a transforming impact by lifting people out of poverty. I’ve seen that happen in concrete terms in both agricultural and financial technology projects.”

In Anton’s view, there are many realities in financing. There is a big difference between whether to transfer money from one pocket to another in a public stock market transaction or whether to invest in startups trying to expand their social impact. He emphasises that positive social impact is real, and is making progress all the time. Nevertheless, it requires money and hard work; nothing moves by itself.

How much, then, is making an impact mainly about just creating the impression of responsibility? It is difficult to see the big picture, but Anton is convinced that companies also want to pass their good fortune on to others. Instead of cleaning their reputation, large companies can make impact investments under an entirely different brand than their parent companies. Many donors also try to help unselfishly, without making any investment.

State-owned investment company Tesi’s mission is to invest profitably, and by doing so to develop Finland’s investment market and promote Finnish business and economic growth. Anton’s work posting is no way associated with Tesi’s investment activities.


Nairobi – a mixed bag of surprises

+ A pleasant and developing city.

+ People are open and the city has good restaurants.

+ Easy to create networks and make friends.

+ Surprisingly green city – plenty of parks.

+ Excellent leisure opportunities: safaris, mountains, beaches and inexpensive services.

– Crazy rush hour and dangerous traffic that follows no rules.

– Corruption is deeply embedded in state agencies.

– Because of the insecurity, residential buildings are also guarded. By avoiding disreputable districts, though, it is safe enough to walk around during normal hours.


Mercy Corps

What it is: A global non-governmental, humanitarian aid organization. Founded in 1979, founder Dan O’Neill.

Where: Mercy Corps is on the ground in more than 40 countries helping people recover from disaster, build better lives and transform their communities for good. Mercy Corps has operated in Kenya since 2008.

By whom: Staff of 5 500+

Mercy Corps Ventures: Makes equity investments of USD 100,00–300,00 in seed funding that is strongly focused on responsibility and making a positive social impact. Recipients are early-stage companies operating in the fields of agricultural technology, financial technology, youth unemployment, and distribution & logistics in remote areas. The fund aims to extend the impact of its projects to transform the lives of 30 million people by 2030.

Web page: https://www.mercycorps.org/ventures. Download also the fund’s Impact Report via the link on the same page.


Anton Jantunen

Who he is: Anton Jantunen, Investment Manager in Tesi’s Growth & Industrial Investments team.

Education: MSc (Econ) from Aalto University, majored in financing. His travels in developing countries sparked his interest in making an impact. Wrote his thesis for a fund that invests in early development stage markets.

Work experience: Has worked at Tesi since 2016. Previously worked in the EY’s Corporate Finance team as a Senior Analyst. Work experience also from Finnvera, Deloitte and Danske Bank.