Building Lasting Relationships Through Finance
In 2009, the RSF Mezzanine Fund, L.P., provided mission aligned growth capital to Guayaki, a social enterprise that imports certified organic, rainforest-grown yerba mate from South America. This funding relationship was designed to provide Guayaki with the capital to grow without requiring a liquidity event, such as a company sale or IPO, which could ultimately compromise its mission and values.
Two years later, Guayaki has indeed grown. With a strengthening brand, and the launch of a new canned maté line, the company’s sales have grown 25%, to $12 million in 2010. As Guayaki has matured as an organization, their financing needs have changed as well. We at RSF are pleased to continue this journey with them and recently closed a second loan to Guayaki, this time from the RSF Social Investment Fund. As a more established organization, Guayaki is now ready for senior debt and we are proud to provide them with a line of credit to support their continued path to success.
At the heart of Guayaki’s success is its innovative business model, Market Driven Restoration. This model links customers’ purchases to its partner farming communities in the rainforests of Argentina, Paraguay, and Southern Brazil. These indigenous farmers, using sustainable practices, harvest the yerba maté, generating a renewable income stream that enables their communities to improve their lives and restore their lands. Guayaki works closely with the farmers, and encourages the cultivation of the plants under the native rainforest trees. The company also provides technical advice on how to create nurseries, and helps with managing the organic growing process from cultivation through harvest. Guayaki then buys what is produced at fair trade prices. Farmers are able to repopulate their rainforest with native trees, while earning a living wage in fair working conditions.
The company is ultimately working toward a mission to steward and restore 200,000 acres of South American Atlantic rainforest and to create at least 1,000 fair wage jobs by 2020. To date, they have restored some 20,000 acres of rainforest.
Since the start of this relationship, RSF has deeply believed in the mission of Guayaki, especially under the leadership of its CEO, Chris Mann. “The General Partner believed in Chris’ integrity and capability to drive higher revenue and profitability levels that would eventually allow them to attract a lower cost of capital—whether through RSF or another outside financing source,” said Joe Avenatti, Managing Director of the RSF Mezzanine Fund. “Fortunately, Chris was successful in doing just that and decided to stay within the RSF community.”
Guayaki will use some of the funds from this loan to pay off the remainder of their debt from the original Mezzanine financing. Not only is this a great step forward for Guayaki, it also marks the second realized investment for the RSF Mezzanine Fund.
Preserving the company’s mission and values has always been of great importance to Guayaki’s leadership team when seeking capital to help finance the company’s success. At RSF, we seek financial transactions that are direct, transparent and personal, based on long-term relationships. Our continued relationship with Guayaki exemplifies our commitment to these values and we are proud to partner with this incredible organization through their next phase of development.
To learn more about Guayaki please visit their website at http://guayaki.com/.
This loan was made possible by the investors of the RSF Social Investment Fund. To learn more about how you can help RSF make more loans to social enterprises like Guayaki, please visit http://rsfsocialfinance.org/services/investing/social/.
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