#DealFlow 5.23.16: Acumen Comes to America, UBS Bets on Biotech, Leo Backs Runa, Bridges Exits

Acumen is best known for investing in early-stage companies offering products and services like solar lanterns, drip irrigation and waterless toilets for “base of the pyramid” customers in Africa, South Asia and Latin America.

dealflowNow the nonprofit impact venture fund, based in New York, is looking homeward. Its new fund, Acumen America, has backing from Robert Wood Johnson Foundation, Barclays and the Hitachi Foundation to “help build ladders out of poverty,” as director Catherine Casey put it, with a portfolio of U.S. investments in health, workforce development and financial services.

Acumen says that early-stage risk capital is scarce for entrepreneurs and businesses focused on low-income markets in the U.S. By their count, only six percent of all venture capital in the U.S. is deployed in rounds of one to four million dollars, and 70 percent of all funding is focused on only three states—California, Massachusetts and New York. Acumen will make seed and Series A investments. Here's Acumen CEO Jacqueline Novogratz on the new fund. 

Its first deal is a $500,000 investment in Healthify, a New York tech company helping case managers connect patients to critical social services to improve health. Acumen estimates unaddressed social needs, like food insecurity and housing instability drive $85 billion a year in additional healthcare spending. Healthify's $2.5 million seed round includes Primary Venture Partners, Milestone Venture Partners, Kapor Capital and BlueCross BlueShield Venture Partners.

Acumen also put $300,000 into WorkAmerica in Washington D.C., which seeks to expand access to employment in skilled trades for students from community college and technical institutions. Almost half of of employers struggle to find qualified talent for middle-skilled trades, yet less than half of aualified candidates find jobs in their field of study. WorkAmerica says it has the potential to improve access to meaningful career opportunities for up to 6.5 million students annually from the more than 900 community colleges across the United States.

Other #Dealflow

Sustainable agriculture supply chains. ImpactAlpha featured Uncommon Cacao‘s CEO Emily Stone on our ROI Podcast just as the premium chocolate broker was set to close $1.575M Series A. The lead investors are Pi Investments, Acumen, 1to4, GiftVest, and WealthPlus. Uncommon Cacao works in Latin America to build a more fair and sustainable specialty cacao supply chain. Listen to Emily Stone of Uncommon Cacao on the Returns on Investment podcast with David Bank.

More investment in early-stage biotech to fight cancer research. UBS, the giant Swiss bank, has launched a giant $471 million Oncology Impact Fund to invest in early stage biotechnology companies focused on curing cancer. The fund is the latest high-profile effort seeking to accelerate scientific progress against cancer. Sean Parker, the Napster co-founder and early Facebook exec, recently launched the $250 million Parker Institute for Cancer Immunotherapy. Vice President Joe Biden’ is leading a National Cancer Moonshot Initiative. In addition to its investments, the UBS fund will make grants for academic cancer therapy research and access to cancer care in developing countries , funded by 20 percent of the manager’s performance fee and 1% of royalties on drugs that come to market.

Bridges exits two UK deals. Bridges Ventures completed the sale of Airedale House – a mixed retail and office property in Leeds, from its Bridges Sustainable Property Fund . The sale to GM Legato Property for £6.625  million (about $9.6 million) reflected a net initial yield of 8 percent. Under Bridges’ ownership, the property went through a substantial environmentally-led refurbishment, including the installation of solar photovoltaic panels on the roof to generate electricity.

In Newcastle, the Bridges Social Entrepreneurs Fund exited CASA, an employee-owned domiciliary care social enterprise that has almost quadrupled its care provision in the last four years. The Fund had invested £400,000 (about $580,000) in CASA using an innovative form of quasi-equity, whereby the investor is repaid if the borrower succeeded in meeting various growth and impact targets. CASA has done this so successfully that it has now been able to raise a second round of social investment, led by Big Issue Invest.

Fintech for good. Impact Guru, a Harvard Innovation Lab–incubated fintech company that provides social crowdfunding services, has secured a seed investment of $500,000 from Singapore-based venture capital  firm RB Investments and private investment platform Fundnel.

A financial inclusion exit in India. With its IPO just completed, several impact investors such as FMO and Women’s World Banking Capital Partners are exiting Ujjivan, a financial services company with a mission to provide a full range of financial services to the economically active poor to build better lives. The investors are reported to have quadrupled their investment.

Lumina's social investment strategy. The Lumina Foundation kicked off a social investment strategy with three investments. Credly is a technology platform for verifying, sharing and managing digital badges and credentials that empowers the recognition of lifelong achievement. BridgeEdU is a provider of intervention services to improve retention and college completion targeting the highest-risk first-year college students. And New Profit is a leading accelerator with a long history and proven record of scaling high-impact nonprofit organizations.

And finally…

Now we know how he fought that bear. Actor Leonardo DiCaprio joined professional tennis players John Isner and Steve Johnson to invest in Runa. The fast-growing beverage startup works with Ecuadorian farmers to manufacture sustainably produced organic teas and natural energy drinks made from the guayusa plant found in the Amazon. DiCaprio, who won an Oscar for Best Actor for his role in The Revenant, will donate all of his shares back to the guayusa farmers, making them direct shareholders.

Disclosure

DealFlow is ImpactAlpha’s roundup of what, where, how and why impact capital flowed each week… See more impact deals in ImpactAlpha’s DealFlow section. And send your dealflow news to info@impactalpha.com.

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