Movirtu’s Cloud Phone Service: Funding a Base-of-the-Pyramid Venture

by: Ted London

Publication Date: January 5, 2012
Length: 18 pages
Product ID#: 1-429-162

Core Disciplines: Base of the Pyramid, Entrepreneurship & Innovation, International Business, Strategy & Management

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Who are the right investors for a for-profit company targeting the world’s poor?

Before this start-up spends hundreds of hours pursuing venture capital (VC), Movirtu must decide whether a profit-oriented VC investment will fit its vision for both growth and social impact. Movirtu’s “Cloud Phone” software is designed for the nearly one billion people who cannot afford mobile phones and, as a result, borrow phones from friends and family. Movirtu provides phone sharers with a private number that sends and receives calls. Movirtu already secured two seed-round impact investors, Gray Ghost Ventures and Grassroots Business Fund. For its next round of financing, Movirtu was approached by TLcom Capital, an experienced VC. Students must decide: will having TLcom as an investor allow Movirtu to not only survive but achieve maximum financial and social impact?

Teaching Objectives

After reading and discussing the material, students should:

  • Analyze the role that subsidies can play in BoP venture development.
  • Evaluate the advantages and disadvantages of using impact investors as a source of BoP venture funding as compared to other potential investors.
  • Explore how venture leaders can manage investors with differing expectations.