Zero Gap Fund Mobilizes $1.04B in Private Capital To Advance UN Sustainable Development Goals

Rockefeller Foundation and MacArthur Foundation’s impact investing collaborative releases its 5^th annual report.

NEW YORK | July 10, 2024 ― Today, The Rockefeller Foundation released its annual Zero Gap Fund: 2023 State of the Portfolio report, highlighting the critical role of catalytic capital in addressing the world’s most pressing challenges. As of December 2023, the Zero Gap Fund (ZGF or the Fund) had facilitated the mobilization of over $1.04 billion in private finance across 12 high-impact investment strategies. In 2023, the Fund made two new investments, reaching its full commitment of $30 million. As of January 2024, two of its investments have successfully matured.

The Zero Gap Fund was launched in 2019 in partnership with the John D. and Catherine T. MacArthur Foundation to promote investment in scalable and innovative impact-driven investment solutions. The fund deploys patient, risk-tolerant, and flexible capital into promising financial strategies and mechanisms aimed at increasing large-scale private investment to advance the UN Sustainable Development Goals (SDGs). These goals include ensuring healthy lives, achieving gender equality, and promoting full and productive employment.

“Across its portfolio, the Zero Gap Fund invests in disruptive technologies and tech-enabled companies to address climate change, regenerative agriculture, financial inclusion and access to essential services. The Fund channels impact-focused market opportunities to mainstream investors, reducing traditional market barriers to mobilize private capital at scale,” said Maria Kozloski, Senior Vice President, Innovative Finance, The Rockefeller Foundation. “As the Zero Gap Fund’s portfolio matures and climate change worsens, we are seeing proof of concept for solutions and strategies that are critical to for deliver positive impact to at-risk people, communities, and ecosystems.”

“We are proud to support the Zero Gap Fund and The Rockefeller Foundation with one of our field partnership investments as part of the Catalytic Capital Consortium–an investment, learning, and market development initiative to increase the knowledge, awareness, and use of catalytic capital globally,” said John Balbach, Director, Impact Investments at the MacArthur Foundation. “This collaboration between our foundations is demonstrating the power of catalytic capital to scale up investments into promising new financing vehicles that help build a more just, equitable, and sustainable world.”

In 2023, ZGF made two new investments: Blue Forest’s FRB Catalyst Facility and the Trailhead Capital’s Regeneration Fund I. Both investments highlight the importance of collaboration between finance, science, and communities to address the effects of climate change and build resilient ecosystems.

Zero Gap Fund Impact Highlights:

• Blue Forest’s Forest Resilience Bond I (FRB I) uses a public private partnership structure to mobilize private capital for investments in forest restoration and fire risk mitigation to protect communities and ecosystems on public lands. As of 2023, FRB I has helped to avoid 27,280 metric tons of CO2e emissions, restore 2,675 acres of terrestrial ecosystems, and protect 27,601 acre-feet of water supply. FRB I matured in December 2023.
• LeapFrog’s Emerging Consumer Fund III provides access to financial services and healthcare for emerging consumers in Sub-Saharan Africa, South Asia, and Southeast Asia. Through its portfolio companies, the fund has delivered essential healthcare services to 14.8 million emerging consumers in 2023 and enabled more than 97,000 jobs since 2019.
• Lightsmith’s CRAFT finances solutions for climate adaption and resilience to improve the lives of under-served communities globally. Through its investments, CRAFT has successfully reduced 1 million tons of net GHG emissions, while creating more than 1,300 net new jobs as of 2023.
• Impact Investment Exchange’s Women’s Livelihood Bond 2 (WLB2) provides capital and other assistance to women-focused microfinance institutions and SMEs in Asia Pacific. It has directly reached more than 114,000 women emerging consumers and helped more than 18,000 women access financial literacy training as of 2023. WLB2 matured in January 2024.
• Founder’s First Capital Partners provides revenue-based financing to underfunded and underrepresented entrepreneurs across the United States. As of 2023, the company deployed $8.9 million across 35 loans with an average size of $255,000.
• Apis & Heritage (A&H)’s Legacy Fund I finances the conversion of companies with large low- and moderate-income workforces of color into 100% employee-owned businesses using an employee-led buyout structure. As of December 2023, A&H has converted 3 family-owned business into employee-owned firms, creating 110 net new jobs.
• Seedstars’ International Ventures II is a seed-stage venture fund that invests in tech-enabled startups across emerging and frontier markets globally. Seedstars has committed $6 million across 31 portfolio companies creating 205 new full-time positions.
• Horizon Capital’s Growth Fund IV is Ukraine’s leading private equity firm and invests in innovative, export-oriented, asset-light technology companies that can withstand volatile macro environments. As of 2023, their fund has invested more than $48 million in Ukraine-based companies.
• Blue Forest’s FRB Catalyst Facility leverages the public private partnership structure of the Forest Resilience Bond to create a pooled, revolving investment facility to accelerate the financing of critical ecological restoration projects. As of 2023, their efforts have helped avoid more than 26,300 metric tons of CO2e emissions.
• Trailhead Capital’s Regeneration Fund I supports businesses that develop sustainable and regenerative practices in agriculture and food systems, via carbon sequestration, biodiversity, land preservation, water conservation, food waste and quality. The Regeneration Fund I has conserved 411 million gallons of water, avoided more than 11,000 tons of CO2e emissions, and impacted 3.4 million acres of land across their portfolio companies.

About The Rockefeller Foundation

The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We make big bets to promote the well-being of humanity. Today, we are focused on advancing human opportunity and reversing the climate crisis by transforming systems in food, health, energy, and finance. For more information, sign up for our newsletter at www.rockefellerfoundation.org/subscribe and follow us on X @RockefellerFdn and LI @the-rockefeller-foundation.

About the John D. and Catherine T. MacArthur Foundation

The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions, and influential networks building a more just, verdant, and peaceful world. MacArthur’s Impact Investment program is working to build the field of impact investing and provide catalytic capital to address social and environmental challenges around the world. MacArthur supports the Catalytic Capital Consortium, an investment, learning, and market development initiative conceived of in partnership with The Rockefeller Foundation and Omidyar Network to demonstrate the power of catalytic capital and to expand its use.