A nine-year relationship and diverse funding rounds support social enterprise’s rapid growth and community impact

Melinda Cheel
Aug 8, 2018 · 4 min read

Often described as the lungs of the earth, the South American Atlantic rainforest is a treasured biosphere that replenishes the earth’s air and houses millions of plant and animal species in its region. With this understanding at heart, David Karr and Alex Pryor founded Guayakí Yerba Mate, the now well-known yerba mate–based beverage company. In fact, the impulse of that heart has shaped both the identity of the company and its logo. The duo had a bold mission to accomplish through the means of social enterprise: to steward and restore 200,000 acres of South American Atlantic rainforest and create over 1,000 living wage jobs by 2020.

When Guayakí’s founders started their business in 1996, they thought they would help preserve the rainforest — one of the globe’s most endangered habitats — by giving local communities a way to make a living from working within it without cutting down trees. A few years in, though, they faced a devastating reality, a map showing 95 percent deforestation of the Amazon since 1900. Preservation, they realized, was not enough, and with that, they started focusing on reforestation. For those efforts, the yerba mate plant was vital.

Guayakí supplier and yerba mate farmer. Photo by Dane Grady.

Farming standards support forest restoration, provide living wage

Typically, industry farmers cultivate yerba mate by using traditional slash-and-burn methods for full sun. Though the technique makes for a fast-growing crop, it is a far cry from the plant’s natural canopy of the Upper Paraná Atlantic rainforest, which stretches across Argentina, Paraguay, and Brazil.

In an environmentally conscious shift from the norm, Guayakí supplies its yerba mate from small-scale farmers growing organically and using an environment resembling the plant’s shady native habitat. By insisting on a supply chain of solely shade-grown plants, the social enterprise encourages farmers to reforest their land with native hardwoods. This important ecological growing method and standard has made it possible for Guayakí to pay farmers a price premium to grow yerba mate, provide living wages and healthy working conditions, and help fund community development projects for local, predominantly indigenous, communities.

Integrated capital approach advances company values

RSF Social Finance has been a loyal partner in Guayakí’s tireless effort to protect the Amazon and empower its native people. Beginning in 2009, RSF provided an investment of $500,000 that helped Guayakí roll out its canned beverage line, develop its small-store delivery distribution model, and build inventory. In 2011, RSF extended the social enterprise a $1.9 million working capital line of credit to fill a cash flow gap between inventory purchases and the sale of goods. Guayakí’s credit line with RSF was subsequently increased to $2.75 million in 2013, $4 million in 2015, and $5 million in 2016 to support the social enterprise’s fast-paced growth.

RSF has provided Guaykí with diverse forms of funding for growth, operations, and infrastructure.

Last year, RSF made its most significant financial commitment to date, a $10 million financial package, complete with values-aligned partners and international impact. With funding from its Fair Trade Capital Collaborative, RSF is set to provide Guayakí the capital it needs to build a centralized processing and drying facility in Brazil.

Guayakí’s impact in 2017 was stellar. Last year, the social enterprise advanced its mission metrics to capture the number of stewarded acres and living wage jobs more accurately. It also hired two people to lead and expand its regeneration and sustainability strategy in the U.S. and South America. Additionally, Guayakí launched a zero-waste program at its headquarters and completed a full greenhouse gas inventory of its supply chain; its findings showed that the social enterprise’s operations are carbon neutral.

Financing can be easy and cheap to find for fast-growing companies like Guayakí. But, not all capital is created equal, and some comes with strings that can hobble an unsuspecting social enterprise. Guayakí purposely seeks capital from mission-aligned investors who support its work to regenerate the rainforest. The social enterprise stays with RSF because they trust us to hold and honor their founding vision as a financial partner with a shared interest in healing the ecology while building a sustainable local economy for their community, all the while producing healthy beverages for you and me.

Reimagine Money

New thinking on revolutionizing money and finance from RSF Social Finance

Melinda Cheel

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Reimagine Money

New thinking on revolutionizing money and finance from RSF Social Finance

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