Organizing a Raising Capital Event in Lebanon: Two Innovators’ Perspectives

Being an innovator in Lebanon is challenging. The country is firmly in the grip of its worst economic, financial, and political crisis in more than a decade. Since 2019, Lebanon’s currency has lost more than 90% of its value, while the country’s economic meltdown has pushed an estimated three quarters of the population (UN-ESCWA, 2021) into poverty in the last two years. The agricultural sector has also been affected, as the exchange rate of the dollar against the Lebanese lira continues to rise.

The challenges, however, do contain opportunities. Looking at it through a positive lens, WE4F innovators like Compost Baladi and Biomass continue to work and innovate against all odds. The two companies are in the midst of pursuing investment opportunities to sustain their operations through this challenging time. Both innovators have different profiles but share the same aspiration for a greener, more sustainable MENA region – Biomass as a commercial company with an impact focus, and Compost Baladi as a social enterprise with a strong business background.

Understanding the Innovator and Their Goals

Recently, Compost Baladi and Biomass worked with the MENA Regional Innovation Hub’s Investment Readiness Unit  to organize “Raising Capital” events that were attended by investors from Lebanon and beyond.

Mario Massoud from Biomass (left) and Marc Aoun from Compost Baladi (right) give presentations about their companies during their raising capital events.

Recently, Compost Baladi and Biomass worked with the MENA Regional Innovation Hub’s Investment Readiness Unit  to organize “Raising Capital” events that were attended by investors from Lebanon and beyond. 

The goal of Biomass, a certified organic farming operator in the MENA Region, is expanding its export portfolio. Biomass’ CEO, Mario Massoud, explained that investing in production capacity will fuel Biomass’s export-led growth strategy, helping them build production capacity within farming, post-harvest and packaging. 

As for Compost Baladi, CEO Marc Aoun explained that investing in the company will be used for building production capacity and expanding to the Gulf region. During their presentation, Compost Baladi invited various stakeholders from the community, such as municipal personnel, clients, and grantees, who testified on the value of Compost Baladi’s services and the positive impact they have made on the food saving cycle.

“This event represents what the ecosystem is truly all about. The support we have received throughout our journey is a big part of why we are continuously capable of overcoming the challenges of the country and the sector,” commented Mr. Aoun.

During the event, Compost Baladi went a step further and gave a tour of their warehouse to the invitees to give them a better understanding of how the company functions and see the company’s innovations onsite. 

Looking Toward a Greener Future

The outcomes of the Biomass event exceeded expectations, with 20 non disclosure agreements (NDAs) signed by different private investors. 

“WE4F is an integral part of our development and growth plans at Biomass. Through the program, we have anchored our potential as an agri-food company in Lebanon and the regional markets, and we have identified, validated, and pursued opportunities to directly improve our business and our impact in our communities.” explained Mr. Massoud.

Compost Baladi signed 17 NDAs – 7 of them with high potential. Of the $400, 000 ask, so far they have secured about $325,000 and the last $75,000 will be closed by September 2022.

Successes and Lessons Learned for Other Innovators

For Biomass, 80% of the attending investors were secured by WE4F, of which 50% turned out to be suitable investors. The other 20% were brought in ad-hoc by the Biomass team. A key lesson learned was the need to strategize about how to reach out to investors and to think through maintaining the developed network of investors. Additionally, for innovators that are prioritizing impact funds, engaging ESG investors is a key aspect to consider.

Overall, the Compost Baladi team considered the whole process challenging yet rewarding, especially the process of setting up the term sheets, then adapting them to the legal framework of Lebanon along with the convertible loans through their lawyer’s guidance. For others going through a similar process, it’s important to remember that the success and outcomes of a capital raising event make the rest of it worth the hassle.