TGIF, Agents of Impact!
In today’s Brief:
- Come-from-behind communities
- Japan’s corporate impact venture funds
- Hydrogen-powered European venture capital
🗣 New revivalists. A half-dozen years and many news cycles ago, ImpactAlpha produced a series in partnership with Village Capital featuring dozens of leaders working to revive cities and towns across the US. The “new revivalists” shared many strategies: Go to overlooked places. Solve real problems. Give entrepreneurs space to grow. This month, bipartisan policy incubator Economic Innovation Group went to a thousand “left behind” counties and found the strategies are working, as Dennis Price reports. After decades of lagging population and income growth, such communities just notched their “strongest three-year period of job creation and business growth since the turn of the 21st century.” Similarly, an Oxfam report this week found that the share of US low-wage workers fell from nearly one-third two years ago ($15 an hour then) to less than one quarter now (at $17 an hour). Wages have been rising faster than inflation for more than a year, and yesterday’s surprisingly good inflation report showed prices for fruits, vegetables, meat, poultry and fish, along with gas and airfares, actually dropped last month.
Reports of good economic news are invariably met with the rejoinder to get out into “real America.” ImpactAlpha’s Roodgally Senatus went to West Baltimore to chronicle the “real revitalization” in the city’s “Black Butterfly” of abandoned row houses. The second part of his visual tour (here’s Part 1) tracks the Waterbottle cooperative, founded by David Lidz, which has developed ways to share the appreciation in property values with both workers and tenants. For ImpactAlpha’s Agents of Impact podcast, I chatted with Akiptan’s Skya Ducheneaux, who lends to Native agricultural producers and processors across Indian Country from the Cheyenne River Sioux Reservation in Eagle Butte, SD. Outside the US, borrowers in emerging markets remain a surprisingly good credit risk, as Jessica Pothering reports. “There’s a misconception about the perceived risk that’s not justified,” Tameo’s Ramkumar Narayanan told her. And in a guest post, UNICEF USA’s Erin Egan and 60 Decibels’ Lindsay Smalling write that investments in cookstoves, clean energy and microfinance yielded tangible benefits for children. How do they know? 60 Decibels asked the families themselves.
The price of such progress is vigilance, says Fran Seegull of the US Impact Investing Alliance in a recap of this term’s Supreme Court rulings. “Let us ensure that these attacks playing out in the courts do not lead to harmful chilling effects across the public and private sectors,” she writes. Colorful Capital’s William Burckart filed a dispatch from a White House meeting where LGBTQ+ venture capitalists and other investors pressed for greater representation in capital markets and for corporate boardrooms to mitigate the systemic risks of exclusion. And the Milken Institute’s Ashley Campany rounds up investment models to safeguard women’s reproductive health, an effort made more urgent by a Supreme Court decision two years ago. As EIG’s Kenan Fikri told Dennis, “The tailwind in forging deeper and more inclusive recoveries in communities is an asset that we hope no one squanders.” – David Bank
The Week’s Podcasts
🎧 This Week in Impact. Host Brian Walsh takes up ImpactAlpha’s top stories with editor David Bank. Up this week: Can good economic news change the dreary narrative that has taken hold? Plus, the impact of TPG Rise Fund’s investment in AI-powered cameras that detect parking violations in bus-only zones.
- Listen to the new episode of This Week in Impact. Get the podcast in your feed by subscribing on Apple or Spotify.
Also on the ImpactAlpha Podcast Network:
- Lending to Native-led producers gives Akiptan an edge in regenerative agriculture. Indigenous lenders and investors are doing business in ways shaped by and tailored to Indigenous communities themselves. Akiptan, a Native community development financial institution, has loaned more than $27 million to businesses and producers in nearly 30 tribal communities. “Native agriculture is regenerative by nature,” says Akiptan’s Skya Ducheneaux on the latest Agents of Impact Podcast. Listen now.
- Rebundle’s sustainable braids. ImpactAlpha contributing editor Sherrell Dorsey spoke with Rebundle founder Ciara Imani May for the latest episode of Plugged In about the business of braiding Black women’s hair. Rebundle’s hair extensions are made from banana fiber and non-toxic dye, reducing both the health effects and the environmental impacts of conventional beauty products. Watch now.
The Week’s Deal Spotlight
The rise of Japanese corporate impact funds. Japanese corporations are rolling out corporate venture impact funds to comply with upcoming sustainability reporting requirements for their operations in Europe. Impact investments reached 5.9 trillion yen ($37.2 billion) in 2022, up four-fold from the previous year. Most deals by Japanese investors are in debt and public equity. That could soon change. Starting next year, Europe’s Sustainability Reporting Standards on company social and environmental impacts will apply to any firm with a subsidiary in an EU country. Japanese automaker Suzuki, which has a subsidiary in Hungary, launched a corporate venture fund focused on social impact in India. The car maker has a significant corporate presence in India and recently announced plans to manufacture a new electric vehicle there. The focus of its Next Bharat Venture Fund will be investments in agriculture, mobility, supply chain solutions and financial inclusion, with an emphasis on boosting rural and informal sector incomes.
- Emerging market impact. Corporations dominate Japan’s venture ecosystem. At the height of the market in 2022, Japanese startups inked fewer than 1,000 deals for a total of just 500 billion yen ($3.1 billion). Corporate venture funds invested in half of the deals (US-based investors also invested in half of Japanese deals). They’re increasingly showing up in international impact deals, especially in emerging markets. Electronics company Fujitsu’s venture arm inked its first impact deal earlier this year, in Gojo & Company, a Japan-based microfinance company that serves borrowers in Southeast Asia, India and Tajikistan. Japanese investors are also showing increased interest in Africa’s startup scene, in part to counter-balance to China’s economic presence.
- Go with the dealflow. Share this post and check out our full roundup of ImpactAlpha’s deal reporting this week.
The Week’s Chart
Hydrogen deals boost European venture capital. European investors have some cheery news to send them off for the summer: rising venture capital investment across the bloc. European startups raised $15.6 billion in Q2 2024, up 14% from Q1, and 12% from a year earlier, according to dealroom.co. Energy attracted $5.7 billion in venture funding in the first half of the year, edging out fintech, health and enterprise software. Within energy, hydrogen startups were the biggest winners, snagging $1.3 billion in the first half.
- Hydrogen’s hot. In April, HysetCo, a French hydrogen-powered taxi startup, raised nearly €200 million ($218 million) to expand beyond Paris. Another French venture, HyLight, which makes hydrogen-based drones, got a €3.7 million venture capital injection the same month. Sunfire, a maker of electrolyzers for producing green hydrogen, snagged a €215 million ($234 million) equity investment in March, while Belgium’s Tree Energy Solutions secured €140 million ($152 million) to make a natural gas equivalent from green hydrogen. In other energy sectors, EV charging startups raised $892 million, and stationary energy, such as long-duration batteries, received $615 million in the first half of 2024.
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The Week’s Talent and Jobs
💼 See and share more than two-dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.
Luiz Amaral stepped down as CEO of the Science Based Targets Initiative. The move comes after a controversial decision by Amaral to loosen carbon offsets guidelines and a call by his colleagues to resign… ING Americas promoted Cindy Jia to head of sustainable finance… The US Department of Labor appointed Hilary Abell, who co-founded Project Equity, as chief of its employee ownership division… The NYC Commission on Racial Equity hired Maya Williams, previously with Levy Ratner, as research and policy director.
LeapFrog Investments named Frances Holliday and Pranav Kumar as partners… The McKnight Foundation promoted Ben Goldfarb to director of strategic democracy, media and policy initiatives; Sarah Christiansen to strategic climate initiatives director; and Ben Passer to Midwest climate and energy program director… Ronald Wong, previously with New Jersey Community Capital, joined BlueHub Capital as vice president of commercial lending for the BlueHub Loan Fund.
Movement on the Ground welcomed Helen Maynard-Hill, previously with Euclid Network, as funds and impact director… Justice Climate Fund named Amir Kirkwood, previously of Locus, as CEO… The Local Initiatives Support Corp. appointed Ruth Jones Nichols, previously senior advisor in the US Department of Housing and Urban Development, as executive vice president of programs.
That’s a wrap. Have a wonderful weekend.
– July 12, 2024
