The Endeavor High-Impact Entrepreneur program has been called “the best anti-poverty program of all” by New York Times columnist Thomas Friedman. Endeavor was created 14 years ago as a mentoring program for small to medium-size companies from emerging markets that, like many Latin American outsourcing companies, show big potential.
A candidate for the program will typically have been operating for three to five years, and be worth between $3,000,000 and $5,000,000. Seven years ago, Endeavor decided that Argentina-based software developer Globant fit the profile perfectly.
The company has now become the first in Endeavor’s portfolio to benefit from the newly launched Endeavor Catalyst program, a passive investment vehicle that has added $2,000,000 to Globant’s current funding round of $13,000,000.
Martin Migoya, Globant’s CEO and co-founder, says the Endeavor program has been important to his company’s growth, especially the access it has given them to international advisors. “I remember particular places where we had doubts of what direction to take and had access to people to give us advice and navigate through the process,” Migoya says. “They also provided us with the global vision and reinforced that it was possible. And we started to believe it was possible.” Other benefits of the program included introduction to MBA candidates from MIT and Harvard, opening offices in the US, Brazil, and Uruguay, and the chance to inspire other entrepreneurs to create global companies.
Last year Globant received three awards from Endeavor and was recognized as the top Endeavor entrepreneur. “We are changing the lives and careers of thousands of people,” Migoya says.
Catalysts for Change
In recent years a number of venture capitalists from Silicon Valley have joined Endeavor’s board and instructed the program’s leadership to devise a way to leverage its role with helping their “mentee” companies grow. Up until that point, they relied on generous volunteer “give-back,” which has helped to sustain the program, along with private donations. “We struggled with if we should take an equity stake,” says David Wachtel, Endeavor SVP of marketing & communications, “but we did not want to ‘choose among the children.’”
After much thought and legal consultation, Endeavor Catalyst was born. This non-profit platform allows Endeavor to invest donor money in emerging market companies, based on them meeting certain benchmarks. The first round of funding for Catalyst was raised over that last two months, and Globant was the first company to fulfill the criteria.
“For us, this round means much more than just the $2,000,000,” Migoya says. “It is a symbolic act that shows the reinforced trust that Endeavor puts in Globant; trust that was first shown in 2005 when they selected us as Endeavor Entrepreneurs. That was a key milestone in our history, since they enabled us to learn from some of the most talented and experienced professionals in the world.”
Migoya says that the new money will be used to keep growing Globant as it expands to other cities and countries in LatAm and the US. The company will soon be opening an office in Austin, Texas, and two more in Argentina.
When the investment pays off, all of the earnings will go back to Endeavor to allow Catalyst to regenerate and make new investments. The fund currently has commitments of $10,000,000 with a goal to raise $20,000,000 by the end of year, but the long-term goal is to ensure that Catalyst will be self-sustaining, according to Wachtel.
“Whenever the money returns it will keep helping Endeavor and other entrepreneurs; it is like Sustainability 3.0. They invest in our company and the return of that investment will continue financing Endeavor programs,” says Migoya. “We are committed to Endeavor, and anything we can do we will do it. We don’t have any contract with them. Our heart is with them.”
One way that Globers, as staff of Globant are called, are already helping is by acting as endeavor mentors in Chile, Argentina, Uruguay, and other locations. “It is not Globant,” Migoya stated, “it is the entrepreneurs of Globant. Individuals. Endeavor doesn’t select companies, it selects entrepreneurs.”