Beats | February 7, 2018

Abraaj fund flap, Jibu’s water franchises, better small-biz lending, baby steps toward parental…

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#Featured: ImpactAlpha original

What we know about Abraaj’s $1 billion health fund and its dispute with the Gates Foundation and other investors. If Davos was the party, then the simmering dispute between the private equity investor Abraaj Group and some of its limited partners, including the Bill & Melinda Gates Foundation, is the hangover. Less than two weeks ago, Bill Gates and Abraaj CEO Arif Naqvi shared the stage at the annual meeting of the World Economic Forum to talk about “a new era of global health.” Behind the scenes, representatives of the Gates Foundation and other investors in the $1 billion Abraaj Growth Markets Health Fund had been pressuring Abraaj for months for a fuller accounting of the fund’s finances. At the end of December, Abraaj returned a reported $140 million to investors that had been called but not disbursed.

Abraaj’s health fund is aiming to build hub-and-spoke, geographically clustered health systems in 10 high-growth, high-need cities in Africa and South Asia. The idea is to link networks of health services in urban clusters, driving both better health and lower costs through large-scale investments. Perhaps predictably, some of those projects have run into delays. In Karachi, for example, a sudden ban on high-rises set back the construction of Abraaj’s planned 17-floor hospital. Less predictable is what impact the dispute will have on the broader landscape of private investments to advance the Sustainable Development Goals. To meet the health goals laid out in SDG №3, it’s not just $1 billion that’s needed, but $140 billion in additional investment in health infrastructure every year through 2030. That means tripling current investment levels of about $70 billion each year.

Read “What we know about Abraaj’s $1 billion health fund — and its dispute with the Gates Foundation and other investors,” by David Bank in ImpactAlpha.

Disclosure: ImpactAlpha collaborated with the Bill & Melinda Gates Foundation on “Making Markets Work for the Poor” to share the foundation’s experiences in making program-related investments. The project was published in the Stanford Social Innovation Review and is available here.

What we know about Abraaj’s $1 billion health fund — and its dispute with the Gates Foundation and…

#Dealflow: Follow the Money

Jibu raises $7 million to expand clean water franchises. The social enterprise uses a franchise model to help locals in Eastern and Southern Africa start businesses that provide clean water to their communities. Close to 850 million people worldwide lack access to basic water services. The capital from Jibu’s Series B round will be used to expand in Kenya, Uganda and Rwanda, where the company has already helped launch 200 local water businesses. Jibu is also testing a new franchising model in Zimbabwe and Tanzania, where it uses a local partner to manage the franchising process. “We’re partnering with local developers that have local market expertise to reach scale faster,” Jibu’s Kelli Schroeder told ImpactAlpha. Jibu’s funding round was backed by the Conrad N Hilton Foundation, Danone Communities, the Stone Family Foundation, Africa Healthcare Fund, Maclellan Foundation, Segal Family Foundation and NRD Capital.

Infarm secures $25 million for modular indoor farming. The Berlin-based company makes small indoor vertical farms for herbs and vegetables that it sells directly to grocery stores, allowing shoppers to pick their own produce in the store. Infarm’s team wants to see its technology eliminate waste in the produce supply chain, TechCrunch reports. Demand for locally-grown food is on the rise, both to bolster food security and support local economic activity. In the U.S., local food sales are expected to reach $20 billion next year, a four-fold increase from 2008. Infarm’s Series A funding from Balderton Capital, TriplePoint Capital, Mons Investments, and several previous investors will be used to launch 1,000 farms around Germany and in Paris, Copenhagen, and London.

Resonance gets £60 million infusion to house London’s homeless. The impact investing firm raised the capital for a nine-year fund that will acquire over 300 private apartments and rent them at affordable rates to London’s homeless and people at risk of becoming homeless. The Real Lettings Property Fund 2 raised the $83.7 million from London’s City Hall and Croydon, Lambeth and Westminster districts. Resonance’s first Real Lettings Property Fund raised £57 million and acquired 250 properties with a similar mission. The firm is looking to close its second fund at £100 million. It is partnering with homelessness charity St Mungo.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Featured Event: Latin American Impact Investing Forum

Impact investing momentum in Latin America. Join investors, entrepreneurs, development wonks and other impact practitioners at this year’s Latin American Impact Investing Forum from February 27 to March 1 in Mérida, Mexico. On the agenda: Blockchain for impact, reimagining 21st century cities, the Sustainable Development Goals as a measurement framework and the growing U.S.-Latino market for impact. Forum host New Ventures, the Mexico City-based impact accelerator, is offering 20 ImpactAlpha readers 40% off the price of admission. Use code ALPHAFLII to register.

#Series: The New Revivalists

Jacob Haar: Financing the financiers expanding small-business lending in America. A market that under-lends to businesses owned by women, minorities and veterans is inefficient, says Jacob Haar, managing partner of Community Investment Management. The San Francisco impact investment firm is financing a new crop of lenders and community banks to close that gap by using data and technology to better understand small-business borrowers. CIM provides working capital to firms like StreetShares, which connects military veteran investors to veteran-owned business. Since 2015, CIM has lent $300 million to small businesses in the United States , more than half of them owned by women, minorities or military veterans. “There is more information out there than ever before, and yet, income inequality, or just inequality generally, is extreme at this point in time,” Haar told journalist Sherrell Dorsey. “The existing funding models that we have for lending are broken.” Read, “Jacob Haar: Financing the financiers expanding small-business lending in America,” by Sherrell Dorsey on ImpactAlpha.

New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

Jacob Haar: Financing the financiers expanding small-business lending in America

#Signal: Ahead of the curve

Baby steps on parental leave in the United States. The economy is in its 9th year of expansion. The labor market is tight. Wages are rising. Younger workers, with job options aplenty, are demanding benefits that fit newer definitions of family and work-life balance. The upshot: A few companies are rolling out improved parental leave policies. Recent converts include IBM, McDonald’s, AT&T and Starbucks, which have followed startups and Silicon Valley giants like Google, Facebook and Apple that have long waged a sometimes-brutal war for talent.

The US is the only developed country without guaranteed access to some form of paid maternal leave. Progress has been painfully slow, despite evidence that paid parental leave makes children healthier, parents more productive and companies more successful. It’s up to individual US companies to decide whether to grant parental leave and if they do, how much and to which employees. They’ve generally been stingy with the benefit, with many granting it only to restricted categories of workers, such as salaried employees and birth parents. By leaving low-wage and part-time workers out of their policies, companies have turned access to paid family leave into “a mark of privilege in the United States,” says Sarah Fleisch Fink of the National Partnership for Women & Families.

Read How (some) US companies are competing for talent with paid family leave,” by Pippa Biddle on ImpactAlpha.

How (some) US companies are competing for talent with paid family leave

Thank you for reading. Onward! Please send news and comments to [email protected]