The Brief | August 16, 2022

The Brief: Anti-ESG playbook, urban innovation, consumer fintech in Mexico, climate adaptation for farmers, waste to bio-plastic, Waverley Street’s new CEO

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Greetings, Agents of Impact!

Featured: ESG Backlash

With his anti-ESG fund, Vivek Ramaswamy takes a page from the Infowars playbook. At least 17 conservative-led states have passed, or are preparing, “anti-ESG” laws that ban banks that have curtailed funding for fossil fuels or gunmakers, supported abortion, or committed other sins of “wokeness.” Positioning himself to profit from it all is Vivek Ramaswamy, the author of Woke, Inc. and head of the newly launched Strive Funds. Ramaswamy, a “slimmed-down Alex Jones in Armani suits,” as Ryon Harms of Manifest Social calls him in a guest post on ImpactAlpha, has his eye on red state treasuries and the nest eggs of hardworking civil servants. One lesson Ramaswamy takes from the founder of Infowars is to preach apocalypse and then sell products to profit from it (an example of what Oxford University’s Robert Eccles calls “grift capitalism”). Ramaswamy’s boogeymen: Vanguard, State Street and BlackRock (never mind that those asset managers are among the world’s biggest funders of fossil fuels, deforestation, tobacco and firearms).

Ramswamy is tight with the State Financial Officers Foundation, the group of treasurers that has been coordinating such anti-woke laws. He’s also a mainstay on the campaign trail with Republican politicians such as Florida Governor Ron DeSantis and woke-obsessed treasurers up for reelection this year. One such official, Texas Comptroller Glenn Hegar, a proponent of Texas’ anti-ESG laws, has driven JPMorgan Chase and four other large “woke” banks out of the state and its lucrative bond issuances. Hegar’s politically-motivated switch is estimated to cost Texas taxpayers up to $532 million in interest in just the first eight months. “Limiting competition and squandering taxpayer money for political theater is exactly what a state treasurer is not supposed to do,” says Harms. “Any financial dealings between Strive Funds and the state of Texas – or Florida or West Virginia – should be questioned as a possible quid pro quo for campaigning for Hegar and his red state counterparts.”

Dealflow: Smart Cities

Urban Innovation Fund’s smart cities fund secures $121 million. As many as five out of six people in the U.S. live in urban areas. San Francisco-based Urban Innovation Fund is tackling urban challenges with investments in — and regulatory support for — 30 early-stage tech startups working in transportation, public health and safety, the future of work, energy, and sustainability. The average check size will be $1.5 million. The women-led and owned venture firm has raised more than $400 million in total and backed 39 companies in 18 cities. At least three of every four teams in the portfolio have a woman or person of color founder; half of the portfolio has an immigrant on the founding team. Companies backed include Ethic, which creates sustainable portfolios for wealth advisors; Electriphi, a smart-charging services company for electric vehicle fleet operators; and Jeeves, a fintech company for small businesses.

  • Oversubscribed. Urban’s founders told TechCrunch that the fund set out to raise $80 million, but met its $101 million hard cap. “The round came together much more quickly than we were expecting,” said Urban’s Clara Brenner. The firm created a $20 million co-fund to provide late-stage and follow-on funding to portfolio companies. Urban says 95% of its commitments came from institutional investors.
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Uellbee raises $2.3 million to help Mexican consumers refinance debts. Mexico City-based fintech venture Uellbee wants to help consumers pay down debt and improve their savings. The company offers lower-cost credit to help consumers pay off high-interest debt, like credit cards. It also helps users develop savings plans and offers other financial health and literacy tools. Uellbee raised $350,000 in seed financing from angel investors and $2 million in debt from APx Capital.

  • Modernizing credit. Uellbee’s Francisco Mere says he wants to redesign consumer credit around modern earning patterns. “The problem is not that we are indebted, but that the loans to which we have access do not respond to our needs,” he told LatamList. “With the growth of the gig economy and the freelance sector, income is no longer necessarily constant, nor does it arrive on a certain date, which is why traditional financing no longer makes sense.”
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Dealflow overflow. Other investment news crossing our desks:

  • Swiss digital farming startup xFarm Technologies raised €17 million ($17.3 million) to help farmers adapt to climate change and improve their sustainability.
  • Canadian biotech venture Genecis snagged $10 million to commercialize its technology that turns waste into biodegradable plastic.
  • Online pharmacy startup Lifepack scored $7 million in Series A funding to provide affordable prescription delivery to patients in Indonesia.
  • Pastel clinched $5.5 million in a seed round backed by Ulu Ventures to digitalize Africa’s micro and small businesses. 

Agents of Impact: Follow the Talent

Jared Blumenfeld, California Secretary for Environmental Protection and an Environmental Protection Agency official in the Obama Administration, is named president of the $3 billion climate organization Waverley Street Foundation… ICA seeks a part-time accelerator program associate in Oakland… Palladium is hiring a senior manager in Washington, D.C… The American Sustainable Business Network will host an online discussion on the Inflation Reduction Act, Wednesday, Aug. 17.

Thank you for your impact!

– Aug. 16, 2022