Pajani Singah | Co-Founder, Amazonia Impact Ventures

Speaker A: Foreign. Hello, everybody.

Speaker B: Welcome to the Zenergy podcast. I'm your host, Karn Takar. Today I have the honor of speaking with Pijani Singh, um, co founder of Amazonia Impact Ventures. The company's website shares their mission best with the homage statement of Amazonia Impact Ventures is an impact investor taking action to mitigate climate change and enhance biodiversity by protecting the Amazon rainforest and improving the lives of its people. On this episode, we learn what inspired Pijani to launch Amazonia, what the early days of Amazonia look like, including where they allocated their first $1 million. We discussed Pijani's leadership style, the challenges that his company faced, and where he sees Amazonia going in the next five years. If you liked today's episode, don't forget to subscribe so you don't miss out on any future episodes. And now please enjoy my conversation with Pajani. Sing.

Speaker A: Hello, uh, Pijani, thank you so much for taking the time to join the Zenergy podcast. Really excited to dive into your work at, ah, Amazonia Impact Ventures. And to kick us off, would love to learn about what inspired you to launch Amazonia and how your early experiences essentially led to this moment.

Speaker C: Great. Well, thanks, current and, and you know, I'm glad to be on the podcast and thanks for having me. Um, I guess, uh, just to give you a quick background. So I grew up on a small island in Mauritius, M. So in Africa. Very worth. And I moved to the UK 25 years ago, ended up working in finance and I've been a partner in a hedge fund here in London for almost 19 years now. But about five years ago, you know, I was asking myself, hang on a minute. This, the markets is not really serving the, you know, a lot. A big trunch of the population globally. And what is the social issue that, you know, we can, we can address? So I've tried the charity work. I've tried everything like everyone else in their 30s. And I'm like, okay, this doesn't work. We need a different model. So, so I ended up on a course in Oxford on a, uh, social finance course. And we were talking about how to move capital from the global north to the global south using social finance. And then I thought, well, maybe this is what I'm going to do. I know how to move money around. We do it in the markets for people, you know, people, rich people who get richer all the time. But banks and financial institutions haven't, you know, historically served, uh, the, you know, poorer communities. Either interest rate is too high or they don't have collateral. And I thought we should create a conscious capitalistic business that actually can serve these, these, these demographic and also make profit because capitalism is predominantly what is going to resolve the issues. We know all the others. Charity and communism in my opinion won't work. Um, so hence why, you know, I met my co founder, Aldo, he's from Peru and he said, he said to me, look, charity doesn't work. He's working WWF and all these foundations for many years. But when the foundation money moves out of the equation, there's no capital for these uh, communities to kind of produce their crops and so on. So I said, right, this is what I want to try and tackle is to how to move this business, create uh, a business around that and moving the capital using blended finance, blended debt. And that's what we've been doing and initially we've been doing it with our own capital. So I mortgage my house and uh, so is my co, founder and everyone. So, so we've been doing it with uh, our own capital for the past kind of five years and recently we've just opened it up to external investors.

Speaker A: I really respect that you took a leap of faith in a sense to launch Amazonia. And I uh, personally believe it's really important work to help communities who might not necessarily have access to finance get that access to finance first like to dive into psychological elements of uh, launching Amazonia because I imagine must have been not the easiest of decisions having a pretty cushy hedge fund job for so many years and then uh, sort of transitioning out to launch this venture. So can you talk about what that process look like for you in the moment?

Speaker C: Yeah, I guess. I have two young children, right. I have uh, they are 8 and 10 now, but younger before. And I thought, well, one day, you know, I would like them to remember me. Not just this, this person who's worked in finance and did well and then that was it. I wanted to contribute more to society and, and that was like the true kind of purpose, uh, searching, soul searching, ah, that you do in your 30s and um, and that eventually if you keep looking, you will find it. Um, and that's how you know, I, I went out there, I tried many, many different things. All the failed businesses, uh, you, you know, endless amount of as a proper entrepreneur. I failed 100 times. But you know, I've done some good stuff as well. And uh, I was, I said, well I want to use that knowledge and expertise to try and create something meaningful. And also I felt a duty that you know, I went To a kind of a very state local, state school on the island. And then I was sitting here and I thought but once you get there, so what are you happy? And I was like, not really you. At some point you earn uh, enough that you can afford whatever you want. But then what else? What's the purpose after that? So it was more purpose driven. Um, that's why, you know, I then finally met Aldo and then we started our business together.

Speaker A: What were the first steps that you took in a business perspective after you met Aldo to effectively launch Amazonia?

Speaker C: Well, we were both in Oxford in a pub and we thought we'll start the company uh, outside the side business school. And uh. Yeah. And then the next week we registered the company, started it and I remember clearly when we made our first hundred thousand dollar investment in a, in a coffee cooperative. And then Covid hit. So we didn't even get the chance to travel there. But we thought well if we don't lend to these people this is going to be a complete disaster. But they had solid orders that coffee buyers wanted to get, but they just didn't have the access to the capital. So I remember the first tranche, uh, it was in July sometime. And I was like well this hundred thousand dollar might not come back again. Let's see. I just press send. But it did come back and then that's how we rolled afterwards.

Speaker A: Amazing. Amazing. Could you talk about some additional early investments that you made? Uh, after the.

Speaker C: Yeah, so, so uh, we started working with this indigenous cooperative producing extremely good coffee and they had no lenders until today. We're the only one who lend to them. Uh, and then word of mouth started spreading other, other organization in Peru, uh, started contacting us. We started, we had limited capital, uh then we only had about $1 million, uh, that we managed to put together. Uh, so we were trying to spread it between three or four organizations. Uh, and then, and then you kind of, you know, mothball from there went on and on and we kept getting, it's mostly people approaching us. You know, there's a huge, huge need in these countries for that. And we even started getting uh, approached by other African uh, organization, uh, in agriculture, uh, looking for capital because they thought we could do similar thing in Africa as well, but we couldn't. Because I thought if I want to address deforestation and eventually climate change and so you need to address livelihood and the Amazon is the biggest thing that we have is the low hanging fruit. I thought let's just go for this one because I know how hard it is to raise money. And the fact that Aldo has the experience and community connection through his work in the forest for many, many years, we will just stick to that. Ah, so we didn't spread ourselves thinly.

Speaker A: Just a couple of more questions regarding the early process. So you mentioned that you had a million dollars um, initially to allocate, which I mean by some standards is a lot but also by investment standards probably not extremely sizable. So I'd love to just discern how you were thinking about allocating that million. You said between three to four. But could you go a little bit more into detail in terms of what metrics you were looking at, how exactly these companies came across your desk and uh, and then essentially also like what returns you were looking for in the timelines there?

Speaker C: Yeah. Um, so when we did our uh, kind of research on the course, one of the problem we identified was mainly kind of debt funding that was needed. So we just say we're not going to do any equity investment because there's no such exits in these um, organization they tend. And what we, the every single dollar we invested is always linked to impact targets. And we chose where is our little 1 million dollar can have the biggest impact on people's life and the forest. And the way we do this is we created um, protocol impact link loads which has been around but we are the only one implementing this still today. I don't have, I haven't come across any other private companies doing it. So when we give a loan to a cooperative or to a private organization in the forest, we would say, right, we would like you to replant X amount of trees or you don't have enough women on your board of governance or in uh, more women farmers. And when they achieve this, and we tend to sit with them and say this is a three to four maybe five year plan that we want to work with you and they agree and we build a trust this way and that's how we choose how we allocate only those who are not just looking for short term working capital and then that's it. And they don't care about whatever else we wanted to find. It's like stock picking. You find, you bag the right horse. There are multiple organizations out there, there are some fraudulent ones even in these countries. Right. So we would speak to them and see are they aligned with our mission. We want to stop deforestation, we want to do sustainable land use, we want to improve women livelihood and women farmer livelihood and so on. So if they align with any of these targets then we would Provide the capital. Now when we lend the money, uh, it's normally debt. So it's short term, it could be three to eight months. And on average they tend to borrow it after the rebate we give them, uh, on average it cost them about 1% per month. So it's debt. So and then, you know, and then we, when we have invested on the other side, we'll pay the investors 3 to 5%. So it's, the model is not going to be extractive capitalism. It's going to be that or say if and part of the thing we do, we always ask investors, what's your return expectation? If it's like 10:12, I say well go and put your money in the stock market. That's not what you want to do. So I'm very blunt about it.

Speaker A: Just to clarify. So it's a 1% interest loan to the farmers.

Speaker C: What does it cost for the borrowers? Right, so it ends up costing them Ah, about 1% per month, which is per annum. Um, but this is very, very much in line with what a company in Global north will borrow at for this type of business.

Speaker A: Yeah, no, for sure. Especially in developing markets, I feel like that costs the capital.

Speaker C: Um, by creating a level playing field, they can actually become more productive instead. And they're paying huge amount in interest rates to local organizations or middle, middle loan shops.

Speaker A: How established are these businesses generally before they come to you?

Speaker C: Normally we would need them to be uh, uh, working, exporting for at least two years and have one buyer, uh, a uh, foreign buyer. Normally we have invested in those who are also selling in the local market. But the local market tend to be smaller uh, for the commodity or for the bioeconomy product that they are producing. Um, and we also, what differentiate us is we also work with uh, organization that also buys from that that could be in the US or they could be in Europe. And they also need capital because um, what they, they pay better prices, they pay higher prices and they also find it hard to find working capital. But by us connecting the communities to the market and funding that trade, you're creating access to market, you're creating better livelihood for, for these farmers in terms of pricing and so on.

Speaker A: What have you found to be the biggest challenge that you've experienced as you've been executing on um, Amazonia?

Speaker C: Well on the, on the investment side, it's very hard to find investors in my opinion, who are really catalytic or impact first. Um, hence it's a journey. You find them, they're like unicorns. But we are finding them. Um, so the barrier to scale for us is actually access to capital ourselves. Um because the perceived risk is super high and it's a very, very common phenomenon. Perceived risk is actually a thing. But the way we do it, we de risk the thing. You know, uh, we have lost $00 so far. Um, and then on the, on the, on the ground, you know, building a team to having more access to the ground, visiting the communities more often. You need technical assistance money which you know, at the moment we all funding this from our own P and L. That also is a challenge. And then it's agriculture. You could have you know, cyclical problems, shipping, logistics issues. And sometimes you know, they don't have enough, they haven't produced enough that the uh, order was. So you have, you know, unfortunately agricultural sector is always going to be some risk. Hence why our blended debt fund will have a two tranche of Catholic and senior debt. The Catholic guy saying hey, I'm okay with that. Uh, if I want to have someone's impact on people's life, it's okay if the repayment is delayed or if it's restructured. And then the idea is these guys help us raise 10 times more at the top so that we can move more money to the sector.

Speaker A: Can you also speak about some additional ways that you help de risk?

Speaker C: Yeah, I guess one of the way we derisk it is we regularly go and visit uh, the organizations we work with and also measuring the impact we said they're going to do. That's how we give them the rebate. So engagement, community trust and loyalty is built this way. So they really want to work with us, they want to achieve this. So that's already one way right. Of de risking the project. But financially you can de risk the project by having tripartite agreements. So the buyer, uh, let's say it's a global north buyer, uh, one of them is good sound foods in the US we work with them so we also lend to them. We also provide capital to some of the communities they buy from. Uh, so knowing you know, the order exists and you know, passing the risk to the buyer sometime or simple other, you know, collateral like on the land or factory or mortgage like you would uh, ah, in a different country. But there will still be risk.

Speaker A: If you could go back a couple of years to that bar where we originate. Yeah, to the pub where you originated that idea. Is there any piece of advice that you'd give yourself?

Speaker C: I'm kind of person that I don't find something that fail is is a failure, uh, if it didn't work. It's just a learning process. So there's, obviously there are things that, I mean, setting up the companies in certain structure and shareholders and these are the kind of things. But I, I don't think I regret anything that we've done so far. So, yeah, maybe, you know, commercially how we would have done things. But hey, when you don't know, you're just making things on the day, every day, you know, you're going. So, yeah, I can't think of anything off of my head now.

Speaker A: You learn by doing. I think what you call yourself, from what I'm hearing, is go for it.

Speaker C: Yeah, yeah, go for it. Don't, don't wait. If anyone, if any other entrepreneurs out there saying, I want to do this, but, uh, I don't have the capital, I don't have the thing. But find a way, you know, you don't have. You can still keep doing one thing and still start something else on the side. It's smaller, um, and keep growing it this way. This is what we did, uh, initially, we both did keep, you know, doing other things and then eventually grow it. But the long way is, uh, like, if you keep at it, you will, you will find a way.

Speaker A: Love, love that. Where do you see Amazonia Impact Ventures in the next five years?

Speaker C: Uh, I think we'll still be around. We'll still be working extremely hard, long hours. But I think our hope is, um, we would have moved $100 million to the Global South. So we've done 10 so far, mainly with our own capital in churning the loans in different products and so on. We want to move $100 million and affecting over 10,000 farmers and getting to a million hectares of forest that we can protect and help regenerate. Um, that's kind of what. I'm very realistic. I think it's achievable.

Speaker A: I do as well. I mean, the fact that you've done. I feel like the first time is probably the hardest because now you have results to show. I'd love to get, uh, a sense of, uh. Ah. As I was doing research, I came across the fact that you were an advisor to Unreasonable Supported Ventures. Um, this is a lame joke that I'm about to make, but I hear you turn those Unreasonable Ventures into reasonable ventures.

Speaker C: Yeah, Unreasonable is a great organization. Actually. The founder, Daniel Epstein, is the person that, uh, inspired me to actually go and create Amazonia. So I was, I was a member, I'm a member of the Entrepreneurs Organization and ypo and he was speaking at ah, one event talking about these organizations that uh, Comfort and Reasonable are trying to address global challenges in climate mainly. And I thought this is, I really want to do this. That was in 2018 in Macau, in you know, in China. He was speaking on the main stage and uh, okay. And this is when I went to Oxford the next year to do the social finance course. So he started my journey and I'm always very grateful to Daniel to have kind of inspired me. But unreasonable you when you go in there you find all these entrepreneurs really trying to find solution to address the SDGs, the Sustainable Development M Goals. And um, it's you know we are there to support them like connecting them to investors or providing piece of advice where I failed and so on. Um, and that's kind of what we try and do through these unreasonable programs.

Speaker A: Are there any common traits you see in founders who succeed in scaling impact driven ventures? As an advisor?

Speaker C: Yeah, I mean they're very driven. Right. Um, you have to really kind of say uh, this is the problem I want to address. You're not going to save the world but like narrow it down and do something very, very, very plausible. And I find that a lot of them actually pick their niche and said we're going to address X and this is what we're going to do. Um, but you have to keep at it but also be able to steer. There's always a say that I have like when the plane goes down, you always put your, your oxygen mask first right before you have try and help others. So if you are a uh, budding entrepreneur and you're struggling yourself, you will not be able to help other people. You have to be able to put your own oxygen mask first and then ah, help others. And I find a lot of these guys that come through this program have been through that stage and they, they're okay and they are trying to do something else now. And it comes with experience, come with age as well sometimes. Yeah. For your own oxygen mask first.

Speaker A: I love that thing. And uh, I think a major piece of being an entrepreneur is also being able to successfully embrace uncertainty and navigate through periods where the conclusion ends. Output uh, is not necessarily clear. Do you have any sayings maybe or things that you lean on to help you effectively navigate through in certain periods?

Speaker C: Yeah, I mean it's. Every day is like putting fires out. You know, it's always a constant battle. But I think staying uh, grounded and uh, uh for me exercising is a great way to kind of when I feel really stressed out I go for a run. And I say, this is what you took. This is not the end of the world. You know, I'm okay. Yeah. It's just something that I need to tackle. It's just a. It's just, uh, solving, uh, the problem, solving an equation. And, and it will be fine. What I keep reminding myself I can only do what's within my control. If the universe is doing something else, there's nothing I can do about it. So that's kind of what grounds me every day. Otherwise, you know, you stress so much that you are not functioning at your optimum.

Speaker A: And that ties nicely into my next question, which is about leadership. And again, as I was conducting research for this conversation so that you have, uh, been the EO London president, um, and love to get a sense of how being in this position has influenced your leadership style and approach to building resilient communities within the climate and impact ecosystem.

Speaker C: I think, I think, um, EO is a great organization, the Entrepreneurs Organization. It's a global network, uh, of entrepreneurs, and I serve as the president, the chapter here in London. It's one of these, uh, jobs where you are having to manage other people who are volunteers and no one's employed by you. And that gives you amazing leadership skills because you have to convince the other people working on your board to actually do something for free. And that is a special skill that you learn because it's a thankless job. Right. So why do you join a voluntary organization to help organize learning events or whatever. Right. Uh, so that was, uh, it helped me kind of shape my leadership skill. But also I, uh, think the organization itself, this and ypo, uh, really kind of gives you, uh, aspiration when you meet other entrepreneurs, because there's always someone doing a more amazing thing than you. It's like, wow, I, you know, this guy inspires me. So the bar always gets raised. And I think it's important. It's not a competition, but you kind of learn of these other people.

Speaker A: Thank you. Thank you for sharing all of these personal leadership entrepreneurship tactics. I personally found them helpful and, uh, I'm sure other others will as well. And, uh, now as we conclude, uh, the conversation, I'd love to shift back to Amazonia, uh, and some of the projects you're working on. So, uh, I was reading that Amazonia was named a top innovation winner at the WEF Tropical Forest Commodities Challenge. Can you share about what specific innovation or partnerships set you apart and how you see some of the work you've done, either with regards to this specific partnership or more Broadly fitting into today's rapidly evolving climate finance landscape.

Speaker C: Yeah, so the top innovation winner was during COP26 in Glasgow where we were selected as innovative finance company and it was mainly around the uh, impact link product that we created for debt for smallholder farmers. But uh, but what was, was, you know, was quite unique. I don't think they've seen a model where you work uh, with uh, private organization and cooperatives and link the loans directly to impact targets on the ground. I mean smallholder, you know, smallholder farmers are to have been the biggest cause of deforestation um, you know, throughout time because they will clear one patch and then it keeps going and it keeps going, it keeps going. So the idea is when you work with them and give them access to capital, you can actually stop them from divorcing more because you, they can be certified, you can provide them help for improving yield without having to cut more land to increase production and then connecting them to the buyers who pay a fairer price instead of having to sell cheaper commodity even more. Um, I think we were recognized um, as one of these by the World economic forum during COP26 but since then we've won another award which is the catalytic climate finance facility from Convergence um, two years ago. And that's all about blended finance, how to move blended finance to the global South. Uh, and I believe that blended, so the finance landscape, if we leave it as it is and if we leave you know, the markets to actually people thinking investing in public markets is going to uh, address a lot of the issues. I truly don't believe that. I think you have to make capital move to entrepreneurs and other organization or ah, cooperatives as well in order to address the issue of deforestation and climate change. Um, yeah, so the climate finance and blended debt is I think blended finance is actually a really good tool that we have to actually try and move money.

Speaker A: Building off that and to conclude the conversation, could you provide final thoughts on where you see there to be a gap in terms of getting capital to these important communities and what role you continue to hope to play in facilitating this impact.

Speaker C: So I guess like I said earlier, uh, we try and do what's within our own control for us. If we can demonstrate as a company you can make a good return, uh, uh, which is acceptable to investors and we can attract more capital. That's our mission. And if we can attract you or someone else to say hey, I'm going to start on the company doing the same tackling thing, the ecosystem gets even more but you know, gets bigger, you move 100 million X moves 100 million within their own company, then suddenly you're moving a billion dollars to Google stuff, uh, in various different entrepreneurs. So I believe that, uh, investors should put their money where their mouth is and not just put everything in climate tech, you know, uh, just, you know, that's the right. Right or whatever. A carbon capture, whatever. Put money in people's pocket. If you address livelihood issues, you will resolve a lot of problems. You can address climate change, you can address social issues. And that's by putting money in people's pocket. And the way to do this is this conscious, capitalistic model of entrepreneurs creating businesses that is sustainable for the long run, not exploitative capitalism.

Speaker A: Thank you. Thank you so much for taking the time to join the Zenergy podcast. It's been great to have you on, looking forward to following your journey and I'm excited for you to not hit that 100 million mark, because I know you're going to hit it. No problem to hit that 1 billion mark and excited for Amazonia moving forward. Thank you again.

Speaker C: Thank you, Karen. We need 10 times more people doing these so that we can get to that number, but I believe we have, you know, talent that can do that as well.

Speaker A: Thanks so much for checking out the Zenergy podcast. If you enjoyed today's episode, please take a moment to rate and subscribe to the podcast. It would mean so much to me and the rest of the team. We release episodes every Thursday, so stay tuned for all new episodes. Episodes featuring industry leaders building a cleaner, greener future for us all. See you next time.