Balloon Ventures
Balloon Ventures is building the world’s first missing middle financial institution dedicated to creating good jobs. By combining financial investment of €10k-€50k with tech-enabled business support, we unlock the huge potential of small and growing businesses (SGBs). Our proven model has helped dozens of SGBs in Uganda to grow and improve the working conditions for its employees by offering contracts and paying higher wages. With this second round of support from CFYE, we will further scale our model in Uganda as well as support entrepreneurs in Kenya. We aim to create more than 4500 decent jobs for Ugandan and Kenyan youth. As a recipient of the 2024 exclusive top-up call, we will have the final bridge to achieving full financial sustainability in Uganda and be invested to grow our Kenyan operation to mirror Uganda’s growth path.
SGBs and Youth Employment
More than 80% of women and youth work in the informal sector in Kenya and Uganda. Even though the informal sector is the fastest growing area of the economy, the jobs these SGBs provide are overwhelmingly low quality and provide little to no security. This means that most workers earn below a living wage, have no contracts, and therefore no job security and legal protection. Other challenges like irregular payment and job insecurity are common as well.
Many SGBs “get stuck” and struggle to formalize for two main reasons: Lack of finance and poor management skills. While banks consider investing in SGBs too risky, inefficient financial management further hinders SGBs’ potential to grow. At Balloon Ventures, we tackle both of these challenges by providing SGBs with financial and business support to create good jobs.
Research shows that better management directly leads to productivity growth. That is why supporting business management forms an instrumental part of our solution.
We combine investment of around €30,000 with tech-enabled 1:1 business support to embed strong management practices in our partner businesses. This combination de-risks each investment, thus making an unviable segment viable.
Our Impact
What Are Good Jobs?
Our business model strives to create good jobs. We define good by the following criteria: earning a living wage, providing the employees with formal contracts, and having security at work.
To understand the lived experiences of informal workers, BV, together with 60 Decibels, interviewed 422 informal workers and learned that 46% lived on less than $3.20 per day. On top of this, less than 2% of employees had formal contracts. This pushed workers into precarious conditions. To tackle this and provide workers with decent working conditions, Balloon Ventures requires entrepreneurs’ commitment to good jobs in exchange for investment. We will ask every SGB receiving investment to create contracts and pay employees a living wage.
Balloon Ventures’ support will enable the SGBs to create contracted, fairly paid, and gender-inclusive jobs.
Our business model is proven to work. We have already collaborated successfully with CFYE in the first Call in Uganda and are very excited to deepen our partnership further. The Fund’s contribution will help us invest in 300SGBs in Uganda and Kenya, and create and improve around 4500 decent jobs for youth, at least 50% of which will be for women.
Balloon Ventures (BV) unlocks the potential of small businesses in Uganda and Kenya by providing them with financial and business support. By embedding good management practices into small and medium enterprises in the brick-and-mortar sectors, BV helps them create good jobs for the youth.
A living wage (LW) is a remuneration paid to an employee that is sufficient to afford a decent standard of living and covers the basic needs of the worker and their family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs.