Capital flows in Latin America, listening to customers, North Carolina’s startup ecosystems, crypto solar, LadyAgri hub



Greetings, ImpactAlpha readers!

Signals: Ahead of the Curve

Move over Mexico. Peru tops Latin America in impact investments. Peru is now the top destination in Latin America for impact investment capital. Impact investors invested a total of $1.4 billion in Latin America in 2016 and 2017. The uptick from the previous two-year period was driven by a doubling (from a small base) of capital from homegrown investors. Peru attracted $218 million, more than any other Latin American nation, in 152 investments. Mexico, the longtime leader, fell to third place with $169 million, behind Ecuador ($185 million). Investments made by locally-based investors more than doubled, from $95 million in 2014 and 2015 to $193 million in 2016 and 2017; A little less than half the investors surveyed are based in Latin America. The new data is from the 2018 edition of the “Impact Investing Landscape in Latin America,” a report from the Aspen Network of Development Entrepreneurs and the association for Private Capital Investment in Latin America, or LAVCA. The two organizations released a first edition in 2016.

  • Bigger funds. Investors targeting Latin America expect to raise up to $2 billion in 2018 and 2019. A Latin America Fund of Funds aiming to catalyze blended financing in the region was launched at last week’s GSG Summit in New Delhi. Blue Like an Orange Sustainable Capital notched $100 million for a first close for its Latin America debt fund. OPIC and IDV Invests launched the $200 million Fund Mujer to boost women’s entrepreneurship. TPG’s Rise Fund doubled down on education in Argentina with investments in Digital House and Grupo VI-DA. Adobe Capital launched a second fund targeting small and mid-sized companies in Mexico.
  • Microfinance remains king. Microfinance institutions still draw more than half of all impact investment capital in Latin America. Separating that out, the top three countries for capital deployment are Mexico, Brazil and Ecuador. The new report showed that 55 investors made 860 investments in microfinance, agriculture, information technology, energy and other impact sectors.

Share, Peru tops Latin America in impact investments,” by ImpactAlpha’s Roodgally Senatus.

Register now: Latin American Impact Investing Forum’s Central America and the Caribbean edition rocks Antigua, Guatemala Nov. 7-8. (To review: “A dozen founders and funders to watch in Central America and the Caribbean)

ImpactAlpha Series: Measure Better

Will impact investors listen to their portfolio companies’ customers? Tech startups went “lean” to shorten their product-development cycles. Now, some impact entrepreneurs are using “Lean Data” to quickly iterate on their business models and theories of change. “The single most important feature of Lean Data is its focus on listening to customers in order to serve them better,” writes Alnoor Ebrahim in the second post in ImpactAlpha’s Measure Better series, produced in partnership with Acumen. Ebrahim, a professor at Tufts’ Fletcher School, literally wrote the book on measuring social change (out next year). Acumen’s Lean Data methodology is no silver bullet, he says, and “is better seen as a complement to evaluation approaches such as randomized control trials rather than a substitute.” Read, “Impact investors can gain real feedback from their portfolio companies’ customers. Do they want it?” by Alnoor Ebrahim, in ImpactAlpha and Acumen’s Measure Better series.

ImpactAlpha Series: New Revivalists

North Carolina idea: Invest in ecosystems that invest in entrepreneurs. The Research Triangle in North Carolina remains a strong contender for the Amazon HQ2 project. Durham-based NC Idea Foundation is trying to help the state “build the next Amazon, not buy them,” reports Charlotte-based journalist Sherrell Dorsey for ImpactAlpha. Since 2006 the privately-funded foundation has awarded $3 million in grants to two dozen startup-support organizations in notable NC tech hubs like the Raleigh-Durham region and smaller, nascent startup communities in Pembroke, Wilmington, and Winston-Salem. The effort represents an experiment to ensure communities of color have entrepreneurial and economic opportunity, says Thom Ruhe, who took over as CEO of NC Idea Foundation after seven years at the Kauffman Foundation. Read, “North Carolina idea: Invest in ecosystems that invest in entrepreneurs,” by Sherrell Dorsey on ImpactAlpha (Dorsey is the founder of the well-worth-reading daily tech newsletter ThePLUG, covering entrepreneurs and innovators of color). Take a scroll through the rest of ImpactAlpha’s New Revivalists series.

Dealflow: Follow the Money

Alphabit backs Sun Exchange’s crypto-enabled solar finance model. Alphabit, a blockchain hedge fund (yes, that’s a thing), has invested $500,000 in Sun Exchange. The Cape Town-based crowdfunding platform uses Bitcoin and local currencies to accelerate solar energy adoption. Sun Exchange lets people anywhere in the world finance solar panel installations, and get repaid by schools, nature reserves, rural communities and other organizations that use the power. “This alternative finance mechanism will help cities, businesses and potentially private homes to meet their basic needs, knocking off several Global Goals targets at once,” said Dumitru Vasilescu of the U.N. Development Programme, a Sun Exchange partner. Read on.

responsAbility invests in Indian organic food company Suminter. The Swiss impact investor took a minority stake in Mumbai-based Suminter India Organics for an undisclosed amount. Suminter sources products from 50,000 farmers in Asia and Africa to serve the growing global organic food market, which is expected to nearly triple in the next six years. Suminter is responsAbility’s second investment in India’s food and agriculture sector. Dig in.

Send deal news and tips to dealflow@impactalpha.com.

Agents of Impact: Follow the Talent

The LadyAgri Impact Investment Hub launched to provide financing, technical assistance and food-tech partnerships for women agricultural entrepreneurs in Africa… ImpactAssets opened applications for next year’s ImpactAssets 50… Nathan Cummings Foundation is looking for fellows with solutions to the climate crisis and growing inequality… The World Benchmarking Alliance is hiring a research director (see, “Can corporate sustainability benchmarks turn the SDGs into a race to the top?”).

October 16, 2018.

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