Greetings Agents of Impact!
In today’s Brief:
- Opportunities in food waste reduction
- Solar-powered irrigation in Africa
- How insurers are fueling climate risk
Featured: Food Tech
Opportunities across the investment spectrum to recycle and reduce food waste. Understanding how to fund food waste solutions can be difficult, with a “mish-mash of different industries that are at varying lifecycle stages,” acknowledges Alejandro Enamorado of ReFED, a national nonprofit that aims to end food loss and waste. But maturing and scalable models make it an increasingly investable sector. And funders are indicating they’ll allocate more to such opportunities this year, after last year’s dip. Food waste investments outperformed the broader food and land use sector, Enamorado writes in his latest market update for ImpactAlpha. “We’ve already seen some funding activity again,” he writes. “There is an important opportunity for impact and philanthropic capital to support the sector in light of the difficult investment environment.”
- Market landscape. Recycling remains dominated by established, centralized infrastructure, with few disruptors developing distributed infrastructure closer to sources of waste. Waste prevention, including shelf-life extension and supply-chain solutions for retailers, is benefiting from new technologies. Hazel Technologies is working to prevent waste with an additive that extends shelf life. Misfits Market built its own subscription and distribution business for unwanted “ugly” produce and is now helping other businesses with inventory management and logistics. ReFED’s Food Waste Solutions Summit is set for June 11-13 in Baltimore.
- Patient capital. A number of food waste ventures took a hit last year, with down rounds or being unable to fundraise at all. “The consensus expectation is that valuations will come down with this new reality and ultimately stabilize,” Enamorado writes. Some philanthropic and impact investors are stepping up. MacKenzie Scott granted $15 million to DC Central Kitchen to provide healthy food and employment opportunities. Ballmer Group made a $15 million grant to ReFED itself for system-building work. Shelf-extension tech venture Ryp Labs raised a Series A round with participation from King Philanthropies as a supply-chain decarbonization solution.
- Go deeper. ReFED’s Alexandria Coari is keen to explore how catalytic investors can fight climate change by helping to reduce food waste, in a “fireside chat” with ImpactAlpha’s Dennis Price at October’s SOCAP conference in San Francisco. Upvote their proposed session.
- Keep reading, “Opportunities across the investment spectrum to recycle and reduce food waste,” by ReFED’s Alejandro Enamorado on ImpactAlpha.
Sponsored by Tideline
Anchoring in social determinants: A closer look at health-focused investing. The conditions in which people are born, grow, work, live and age are considered to be the social determinants of health. Tideline and Multiplier Advisors announced a strategic partnership this week to support health-focused investors and serve the growing institutional interest in investing in such social determinants. Tune in to their Compass Series webinar, Wednesday, April 17, to learn about investing in the social determinants of health from health industry leaders.
- Institutional impact. The panel will feature Reginald Gordon of Richmond Memorial Health Foundation, Kaiser Permanente’s John Vu, David Zuckerman of Healthcare Anchor Network and Multiplier Advisors’ Mikelle Moore, and will be moderated by Multiplier Advisors’ Colby Dailey and Tideline’s Ben Thornley. RSVP Today.
Dealflow: Adaptation Finance
SunCulture raises $27.5 million to expand solar irrigation for smallholder farmers. Nairobi-based SunCulture has been making affordable irrigation systems for smallholder farmers in Africa since 2013. A decade ago, farmers had difficulty finding affordable technologies designed for small plots of land. Compounding the challenge is that today’s smallholder farmers who rely on rain are pressed by climate change, including unpredictable rain patterns and drought. “Building climate resilience is crucial for smallholder farmers in Africa, who are among the most vulnerable to the effects of climate change,” the SunCulture team wrote last year. The company’s Series B equity round included $12 million from InfraCo. Other investors include Acumen and its Acumen Resilience Agriculture Fund, the Schmidt Family Foundation and Netflix founder Reed Hastings.
- Carbon markets. SunCulture’s lowest-cost irrigation systems start at 20,000 Kenyan shillings, or $150. Its pay-as-you-go product line also includes more sophisticated systems with backup battery storage and add-ons like home lighting and televisions. Revenues from the sale of carbon credits could help the company reduce the price of its products (see related, “Leveraging the carbon markets for clean cooking, climate justice and social impact”). SunCulture last year launched a pilot with support from British International Investment and the Shell Foundation to verify and sell credits based on emission reductions from the displacement of diesel-powered irrigation systems. “Carbon finance must be used to accelerate the scaling of green technology in emerging markets,” said SunCulture’s Samir Ibrahim.
- Share this post.
Nexamp snags $520 million to expand community solar. Community solar projects enable low- and moderate-income residents or businesses to share in the lower costs of renewable energy without having to install their own panels. The half-billion-dollar funding round for Boston- and Chicago-based Nextamp comes amid growing demand for distributed renewable energy and tailwinds from federal climate funding. Manulife Investment Management led the financing round alongside existing investors Diamond Generating Corporation and Generate Capital.
- Democratizing solar access. The investment “underscores the indispensable role of community solar in democratizing access to clean, affordable energy solutions for every American,” said Nexamp’s Zaid Ashai. Last year, Nexamp inked a deal with North American solar panel maker Heliene to secure panels capable of generating 1.5 gigawatts of power from its Minnesota plant to feed its growing pipeline.
- More.
Dealflow overflow. Investment news crossing our desks:
- Munich-based Proxima Fusion, a spin-out from the Max Planck Institute for Plasma Physics, raised €20 million ($21.5 million) for its stellarator fusion power plant design. (Proxima Fusion)
- Sunna Ventures, which will invest in seed stage climate tech startups, launched with $40 million from Chilean family office WildSur Inversiones. (Sunna Ventures)
- Google Ventures led a $20 million Series B round for Alethea Group, a maker of AI-powered social media monitoring tools to detect disinformation and foreign influence. (Axios)
Signals: Climate Finance
Insurance companies are fueling climate risks that threaten their business. Climate change is driving more frequent and costly storms, droughts and floods, and causing insurers to pull out of parts of California, Florida and other states (for context, see, “California’s climate-risk pioneer Dave Jones on our march ‘toward an uninsurable future’ (Q&A)“). That risk has not, however, stopped the industry from underwriting and investing in the fossil fuels and high-emission sectors that are destabilizing the environment. The insurance industry “profits in the short-term from activity, such as fossil fuel extraction, that will ultimately raise its costs and eventually undermine its ability to exist,” says a new report from UK-based nonprofit ShareAction. “This has to stop.”
- Transition to the transition. Less than half of insurers have long-term net-zero targets for underwriting, and just one-quarter are aligned with 1.5 degree Celsius goals. Less than one-quarter of insurers have published transition plans covering their investments or underwriting activities. Just 25% are taking steps to manage biodiversity-related risk. In a ShareAction ranking, European insurers, including AXA, Allianz and Legal & General, scored higher than US firms; Liberty Mutual, Travelers and Northwestern Mutual ranked near the bottom in their categories. Pension funds and insurers have been increasing their allocations to impact investing, according to the Global Impact Investing Network’s most recent survey. Case in point: Manulife’s investment in Nextamp (see above).
- Keep reading.
Agents of Impact: Follow the Talent
Impact Engine is looking for a senior associate of environmental sustainability in Chicago… Sorenson Impact is hiring a director of venture capital and impact investing in Salt Lake City… Palladium seeks a senior manager for project delivery for its Catalyze portfolio in Washington, DC… Social Finance seeks an associate in Boston… UN Women is recruiting a due diligence analyst in New York… Lafayette Square is on the hunt for a remote data analytics and policy associate.
Bolsa Social seeks a lending manager in Madrid… GreenArc Capital is looking for an impact and outreach intern in Singapore… First Australians Capital is recruiting a business strategic advisor… FMO has openings for a sustainable finance officer and an environmental and social officer for energy in The Hague… Nonprofit Quarterly and BLIS Collective are hosting “Remaking the economy,” Wednesday, April 17.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– April 11, 2024
