Providing “catalytic” seed capital of $30 million, the Zero Gap Fund has driven more than $1 billion in investments that deliver “positive and measurable impact at scale to underserved communities,” a report out this week from the Rockefeller Foundation says.

The Zero Gap Fund was launched in 2019 in partnership with the John D. and Catherine T. MacArthur Foundation to promote investment in scalable and innovative impact-driven investment solutions.

The fund deploys “patient, risk-tolerant and flexible capital” into promising financial strategies and mechanisms aimed at increasing large-scale private investment to advance the UN Sustainable Development Goals, which bring countries together in a global partnership across 17 goals for the betterment of humanity.

“In an era of challenging market conditions and ever widening financing gaps for the world’s most intractable problems, innovative financing solutions can make a meaningful difference,” said Maria Kozloski, senior vice president, innovative finance at the Rockefeller Foundation.

“Over the past six years, the Zero Gap Fund has developed into a flexible, risk-tolerant catalyst for private investment to advance the global good. We hope that this report not only illustrates the power of catalytic capital, but also reveals new possibilities for ambition, partnership, and progress,” she said.

Impact investments

The Zero Gap Fund: 2024 State of the Portfolio report, contains deeper dives into data and impacts across investments. For example, these investments helped create more than 1,600 jobs, allowed more than 100,000 women access to capital and removed 2 million tons of CO2 emissions.

Among the projects the report highlights:

• LeapFrog’s Emerging Consumer Fund III (Fund III) is a growth equity fund serving low-income consumers in Asia and Africa, incorporating a blended finance insurance product to mitigate tail-end risks. It has supported more than 161,000 jobs and in 2024 alone, Fund III reached 323 million consumers.
• Lightsmith’s CRAFT focuses on climate adaptation, mobilizing capital for innovative companies delivering technologies that build community resilience. CRAFT has created 615 net new jobs and has served more than 500,000 beneficiaries in emerging markets.
• Founders First Capital Partners (FFCP) is an alternative credit provider that uses revenue-based financing to grow underinvested service-based companies. FFCP has deployed $14.1 million in capital across 52 loans, helping create 201 net new jobs.
• Apis & Heritage’s Legacy Fund I finances the conversion of companies with majority low- and moderate-income workforces into 100% employee-owned businesses using an employee-led buyout structure. Legacy Fund I has helped transition 442 employees into employee-owners across five businesses and helped create 110 net new jobs.
• Seedstars International Ventures II (Fund II) invests in seed-stage tech-enabled startups across emerging and frontier markets and helps them scale. Fund II has committed $9.8 million across 45 companies, helping create 614 net new jobs.
• Horizon Capital Growth Fund IV (HCGF IV) invests predominantly in innovative, export-oriented asset-light technology companies that are more resilient to volatile macro environments. HCGF IV has invested more than $100 million across five companies, supporting more than 4,800 jobs.
• Blue Forest’s FRB Catalyst Facility leverages the public-private partnership structure of the Forest Resilience Bond to create a pooled, revolving investment facility to accelerate the financing of critical ecological restoration projects. FRB Catalyst Facility has begun protection efforts in five locations helping avoid more than 127,000 metric tons of CO2e carbon emissions.
• Trailhead Capital Regeneration Fund I invests in early-stage businesses providing innovative, scalable, tech-enabled solutions for regenerative food and agriculture. Regeneration Fund I has invested in 29 companies, helping avoid 68,000 tons of CO2e carbon emissions.

“The Zero Gap Fund is demonstrating the power of catalytic capital to drive impact across diverse sectors and geographies,” said Debra Schwartz, managing director, impact investments at MacArthur. “We hope others will be inspired by the fund’s use of catalytic capital and its scaled approach to co-investment that is allowing more dollars to flow more quickly to impact-driven enterprises and funds around the world.”

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