Once a year, Convergence (the global network for blended finance and the most authoritative source of market data on the field) publishes its State of Blended Finance report. The 2025 edition, covering the 2024 calendar year, is now available. The data it contains is worth reading carefully, particularly for institutional and philanthropic capital allocators considering how to deploy in the period ahead.
A few headline findings establish the shape of the market.
Blended finance flows totalled $18.3 billion in 2024 across 123 closed deals. That is below the record-high $23.1 billion of 2023, but well above the $14.3 billion of 2022, suggesting that 2023 was not a one-off spike but part of a broader upward trend. The annual market average over the past five years has grown from $11.5 billion in 2020 to $18.3 billion in 2024, an average annual increase of $1.7 billion.
Median deal size has increased substantially. From $38 million across the 2020 to 2023 period, to $65 million in 2024. Three transactions in 2024 exceeded $1 billion. The market is becoming larger and more institutional, not smaller or more cottage.
Climate continues to dominate the deployment thesis. 49 percent of all 2024 blended-finance deals were climate-focused, accounting for over 62 percent of total financing. The convergence of climate and capital is not a future trend. It is the present shape of the market.
And, perhaps most significantly for the structural argument that follows: commercial capital from private-sector investors outpaced Development Finance Institutions and Multilateral Development Banks in capital deployment for the first time, with $6.9 billion in private-sector commitments in 2024. Among private investors, the share of commitments from commercial banks and other financial intermediaries increased from 45 percent in 2022 to 55 percent in 2024.
The market is maturing. The institutional infrastructure is real. The deal sizes are large enough to absorb meaningful institutional commitments. The thesis that catalytic capital can produce systemic outcomes at scale is no longer theoretical. The data is in.
A 5 to 10 percent philanthropic allocation produces a 5 to 10 times multiplier, mobilising up to 95 million dollars in additional senior investment.
From MAD Fund Philanthropic First-Loss Strategy, 2026
The philanthropic gap
Inside the headline numbers sits a more interesting structural finding. Despite the maturation of the market, philanthropic capital represents only 3 percent of total investor commitments in blended finance. That share has actually declined over the past three years, from 6 percent in 2022 to 3 percent in 2024. Total philanthropic commitments to blended-finance transactions over the three years to 2024 were approximately $100 million, against a total market that closed $55 billion of deals over the same period.
In other words: the most catalytic class of capital, the class that on a structural basis is best positioned to absorb early risk and produce the multiplier effect that brings institutional capital in behind it, is deploying at a fraction of its potential. The Convergence report is unambiguous on this point. Foundations have, in their own words, "a higher risk tolerance, longer time horizons, and fewer constraints across asset classes" than other investor categories. They are structurally well-suited to provide catalytic capital. They are not yet doing it at scale.
The reasons are partly structural and partly cultural. Structurally, the instruments that allow foundations to deploy programmatic capital into catalytic positions inside commercial-grade vehicles have been limited. Most blended-finance vehicles separate philanthropic capital from commercial capital into different vehicles, with all the friction that creates. Foundation diligence processes, governance structures, and reporting expectations were built around grant-making rather than around investment. The infrastructure for catalytic deployment has had to be retrofitted, and it has not yet caught up to the demand.
Culturally, the framing of philanthropy as charity rather than as catalyst has been slow to shift. The dominant logic of foundation deployment, for most of the modern philanthropic era, has been to give. To fund programmes. To support causes. To respond to need. That logic has produced extraordinary outcomes and continues to. It is also a logic that, on its own, cannot match the scale of the systemic challenges the next twenty years require addressing. The shift from charity to catalyst is not a rejection of charity. It is an addition to it. Both are required.
Foundations have a higher risk tolerance, longer time horizons, and fewer constraints across asset classes. These are attributes that make them well-suited to invest in opportunities deemed high risk.
From Convergence, State of Blended Finance 2025
The four themes Convergence identifies
The Convergence report identifies four themes that have remained the persistent bottlenecks to scaling blended finance over the past five years. Each is worth naming directly, because each maps to a structural opportunity for the architecture of MAD's catalytic capital layer.
Theme one: lack of a private-sector mobilisation strategy. Donors and concessional capital providers have not consistently prioritised mobilising private capital as a deliberate strategy. The result is that catalytic capital, when deployed, often operates in isolation rather than as part of a coordinated plan to bring institutional capital in behind it. The architectural answer to this gap is exactly what catalytic-by-design vehicles like MAD Fund 1's Class B layer are built to provide. The catalytic dollar is not deployed alone. It is deployed inside a structure that is engineered to attract the senior commercial capital it brings in.
Theme two: local investment is underrepresented. Local capital, regional investors, and domestic institutions remain a small share of blended-finance flows. The Convergence data shows local investors at 17 percent of total commitments, mostly on commercial terms. The architectural answer here is multi-jurisdiction capital architecture: vehicles structured for participation by local investors under regulatory frameworks appropriate to their jurisdiction. The MAD Global architecture (Hong Kong feeder established, Singapore vehicle in development, future jurisdictions to follow) is built around this principle. The platform deploys into Australian companies; the participation pathways are local to the investor.
Theme three: lack of transparency. Blended-finance activity is structurally under-reported. Concessional capital providers rarely share financial terms or post-investment outcomes publicly, which limits the evidence base supporting blended finance as a development tool. The architectural answer is integrated reporting: catalytic capital that sits inside the same Fund Deed as commercial capital, with the same governance, the same reporting cadence, and the same transparency obligations. The MAD Impact Framework, with quarterly reporting overseen by the Impact Advisory Board, is designed for this.
Theme four: the ecosystem remains underdeveloped. Sustainable Development Goal-aligned projects are often too small to absorb scaled investment, and there is limited repetition or standardisation across the market. The structural answer is platform-level architecture: not single-fund vehicles built for individual transactions, but operating platforms that deploy the same diligence capability, the same operating bench, the same assessment methodology, and the same governance across multiple deals and multiple jurisdictions. Standardisation reduces friction. Repetition produces the data that supports the next round of allocation. Both are built into the platform model rather than into the single-fund model.
What follows from the data
Three things follow from the 2025 Convergence findings, taken in combination.
The first is that the market is real, large, and growing. $18.3 billion in 2024 deal volume, against a $11.5 billion baseline in 2020, demonstrates structural rather than cyclical expansion. The infrastructure for blended-finance deployment at institutional scale has matured. Allocators considering the category for the first time are not late. They are entering at the moment when the market's scale and institutional credibility are crossing the threshold that justifies meaningful commitment.
The second is that philanthropic capital is, by the data, the most underutilised class of capital in the system relative to its catalytic potential. The deployment ratio is roughly half what it was three years ago. The tailwinds are present (intergenerational wealth transfer, next-generation principal preferences, maturation of catalytic instruments). The infrastructure to deploy is there. The capital is there. The deployment, currently, is not. That gap is itself a structural opportunity.
The third is that the architectures that will close the gap most effectively are platform-level, not fund-level. The four themes Convergence identifies (mobilisation strategy, local participation, transparency, ecosystem development) are not fund-level problems. They are asset-class-level problems. The vehicles that solve them are platforms that deploy the same operational capability across multiple funds, jurisdictions, and capital classes, with integrated reporting and standardised governance.
That is a description of the architecture MAD is built to be. It is also the architecture the next phase of blended finance will require if it is to scale to the levels the systems the world depends on actually need.
A closing note
The Convergence 2025 report is, on the whole, an encouraging document. It documents a market that is maturing, that is increasingly attractive to private commercial capital, that has demonstrated countercyclical resilience through macro volatility, and that is producing larger and more sophisticated deals over time. It also documents the persistent gaps that limit the market's ability to scale to the level the underlying need requires.
For allocators considering catalytic capital deployment for the first time, the data suggests that the moment to participate is now rather than later. The infrastructure has matured. The instruments are credible. The structural opportunity is large. And the philanthropic deployment ratio is structurally low relative to potential, which means the marginal philanthropic dollar deployed today produces an outsized effect compared to the same dollar deployed at any point in the past decade.
The architecture exists. The data validates the thesis. The work, now, is the deployment.
Read the full Convergence State of Blended Finance 2025 report at convergence.finance. Read more about the MAD catalytic capital architecture in Mark Falzon's book Philanthropy as Amplifier (foreword by Hector D. Mujica) in our Books library. Foundations and aligned philanthropic partners considering catalytic deployment into the MAD architecture are welcome to enter the Investor Room.
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