Why We Invested: Powered by People
We believe in harnessing the power of the global economy to provide better opportunities for vulnerable populations. A significant source of income for many such people is the handmade sector, where artisans create unique products that are increasingly in demand in the global marketplace. Yet the sector is overlooked by investors, so handmade producer organizations often lack the resources they need to grow, adopt new technologies, and engage more fully in global markets.
At the same time, opportunities to produce and sell more handmade products appear to be growing. Retail is changing and 91% of consumers say they would switch brands that align to their values. But, it’s often hard to “vote with your wallet” when there is a lack of transparency in the supply chains you care about.
Powered by People (PBP) is our first investment in ethical sourcing. It’s a unique marketplace platform and suite of digital tools designed to foster buyer confidence and empower ethical producers. It is also improving the livelihoods of artisans, helping them access financing and markets that give them the opportunity to scale up their production.
For MCV this investment represents a powerful overlap of our fintech and employment investment themes and an opportunity to increase resilience for millions of artisans that lack the access to markets and resources they need to thrive.
Market Need
The creative manufacturing and handmade sector represents the second largest livelihood opportunity in low-income countries behind agriculture. Estimates report the market to be worth as much as $526.5 billion, and this value is projected to grow to nearly $1 trillion by 2023. Approximately 300 million people — largely women, youth, and people living in rural areas— depend on their craft for income. But these producers face several challenges that impede their ability to grow, including lack of access to the global market and to the financing they need to scale production to meet demand. They may also struggle to keep up with evolving consumer trends and may not have the know-how to expediently fulfill international purchase orders. At the same time, there’s an overall lack of transparency in the supply chain, making it difficult to assure mindful buyers that products are ethically sourced. With growing consumer demand, a huge workforce, and new and available technology all in play, it’s a prime time for change and innovation within the handmade sector.
The Powered by People Solution
Powered by People is developing an online marketplace that connects organizations working with and supporting artisan producers (businesses, cooperatives, social enterprises and NGOs) with global retailers. The platform will provide buyers the opportunity to source and purchase products from a range of producers and geographies, ensure their ethical origins (via a traceability tool), and share corresponding impact stories. Producers, in turn, will gain access to new international buyers, the purchase order financing they need to scale production to fulfill large orders, and mobile phone-based production optimization tools to assist in the process. Business intelligence and data analytics from the PBP platform can also help producers understand the latest trends in demand. In addition, the traceability tool will influence improvements in responsible production practices, including better working conditions and improved environmental practices, as production is held to a higher standard of transparency.
“After a decade of working in and gaining an understanding of the local markets in Afghanistan and Kenya, my co-founder Hedvig Alexander and I have seen firsthand the incredible human potential that goes untapped — we plan to unleash this potential with Powered by People, by equipping millions of creators with the technology they need to compete, bridging the economic and digital divide, enabling strong, global, profitable businesses,” says Ella Peinovich, Co-founder & CEO, Powered by People.
Investment Rationale
Powered by People is MCV’s first investment in an ethical sourcing platform that provides support to artisan producers in low-income communities where Mercy Corps operates. The sector represents a huge employment and income-generating opportunity for the vulnerable and displaced communities that Mercy Corps serves, particularly women and youth. Through PBP’s solution, we see the promise of the power of technology to increase income for independent producers and create more — and better paying — jobs for those who need them most. The application of technology to provide financing and ensure ethical sourcing of products also has great potential to influence and further our work across many sectors and geographies — in Africa, the Middle East, and around the world. As PBP has engaged more deeply with producer organizations, they have also realized the significant need to digitize artisan organizations. PBP is helping them take this step, laying the foundation for greater engagement by these organizations in global markets. With the adoption of digital tools, handmade groups will be able to streamline production processes and, importantly, gain greater access to financing so that artisans can scale up their production and earn higher incomes while upholding and, in some cases, reviving artistic traditions.
Just as important, PBP is led by an inspiring founding team with deep sector expertise, experience building other ventures in the artisan economy, tech savvy, and extensive networks. We’re excited to support this tenacious team in its quest to enhance the livelihoods of artisans worldwide.
