The Brief | April 3, 2019

Capturing carbon, Aavishkaar’s agtech exit, women’s healthtech, impact mandates from European investors

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Featured: ImpactAlpha Original

How negative can carbontech entrepreneurs go? The goal of carbon-neutrality is passé, even before it has been realized. With climate change hard upon us, carbon-negative startups are aiming to scale techniques to suck billions, or hundreds of billions, of tons of carbon out of the atmosphere and turn it into useful products. As cost curves decline and climate urgency rises, investors can glimpse the contours of what could be a very big market. The nonprofit Carbon180 in Oakland, Calif., estimates the total market for products that can be supplied by carbontech at more than $1 trillion in the U.S. and nearly $6 trillion worldwide (Carbon180 is recruiting 20 carbon waste-to-value startups for its first Carbontech Labs accelerator). A report from the National Academy of Sciences concludes negative-emissions technologies will need to remove 10 gigatons of carbon a year by 2050 to meet climate goals. “The thesis is that society will pay for climate action because we value it,” says Gustaf Alstromer of Y Combinator, which last year issued a call for carbon-removal startups.

Still, carbon-negative startup pitches that lead with climate change are a red herring, James Hardiman, a partner at the venture capital firm Data Collective said at last week’s gathering of Impact.Tech in San Francisco. “It has to be better, faster or cheaper, or help a company deal with regulatory challenges.” Berkeley-based Opus12 has raised $20 million in grants and investments to commercialize what it calls “industrial photosynthesis” that can turn carbon (plus water and electricity) into ethylene and other compounds and eventually into diesel, jet fuel, gasoline and plastics. Costs have fallen ten-fold in the last few years. “We are cheaper than fossil-fuel approaches with today’s costs and we are going lower,” says Opus12’s Nicholas Flanders. Carbo Culture turns organic materials, such as walnut and almond shells, into charcoal-like biochar, which improves soil by holding onto water and nutrients. Each ton of biochar sequesters three tons of carbon. Novonutrients is using biotech to turn untreated industrial emissions of CO2 into protein, initially as fish feed for aquaculture operations.

Keep reading, “How negative can carbontech entrepreneurs go?” by David Bank on ImpactAlpha.

Dealflow: Follow the Money

Aavishkaar exits Indian agtech company ULink with one fund – and invests with another. The Indian impact investor backed ULink in 2013 through the early-stage Aavishkaar India II fund to expand its telephone hotline to help small farmers secure affordable seeds, fertilizer and other agricultural inputs. Pune-based ULink’s online- and app-based platform now supports 175,000 farmers and 200 suppliers in the states of Maharashtra, Gujarat and Rajasthan. Aavishkaar’s $94 million early-stage fund exited ULink in the company’s recent $27 million Series C round, reaping a 13.1x return on investment, Aavishkaar disclosed in a statement. But Aavishkaar is not done with ULink; its later-stage Bharat Fund joined the latest round. Here’s more.

NextGen Jane raises $9 million for women’s health diagnostics… Oakland-based NextGen Jane is trying to improve early reproductive health diagnostics by letting women mail in used tampon samples to test for early signs of disease. It markets the service, still in beta stage, as more convenient and comfortable than a visit to a gynecologist. NextGen Jane raised $9 million from materials tech investor Material Impact, Access Industries, Viking Global Investors and Liminal Ventures. Other health and consumer tech startups addressing women’s reproductive health include cancer-screening companies Naramai in India and Stack Diagnostics in Nigeria, and menstrual product companies like Rael. Learn more.

…as Elvie clinches $42 million for women’s health apps and devices. The London-based company is designing healthcare products specifically for women, including a pelvic muscle-toning app and a silent wearable breast pump. “Whether it’s menstruation, pregnancy or menopause, women’s bodies have been shrouded in taboo for centuries,” says Elvie’s Tania Boler. “We know so many issues of womanhood can be improved by technology, and there is so much potential in this space.” The company’s Series B round was backed by private equity firm IPGL, Octopus Ventures and Impact Ventures UK. Elvie will focus on new research and development and expansion to the Americas, Europe and Asia. Check it out.

Signals: Ahead of the Curve

New impact mandates from European institutional investors. Pension funds and other institutional investors representing €12 trillion gathered in The Hague at Phenix Capital’s fifth Impact Summit Europe (see, “European pension funds move to operationalize their impact strategies). A few takeaways (h/t Marina Leytes):

  • Impact-weighted. “The impact revolution will affect every one of your portfolios,” said Sir Ronald Cohen. Generally accepted accounting principles took 90 years, but generally accepted impact frameworks will arrive more quickly so both risk and return can be optimized for impact. Finance needs impact-weighted financial accounts, Cohen said.
  • Impact mandates. ASR Asset Management, part of the Dutch insurance company, carved out a mandate of €300 million per year, or 3% of the portfolio, for impact investments focused on the energy transition and affordable housing, says ASR’s Jack Julicher. PGGM, the Netherlands’ second largest pension fund, has a €20 billion impact mandate in public equities and over the next five years will create a €500 million private equity impact mandate, says PGGM’s Maurice Klaver.
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Agents of Impact: Follow the Talent

Taryn Goodman, previously of NatureVest, and Walter Robb, former co-CEO of Whole Foods,  join the food and agriculture team at TPG Growth’s Rise FundIfeyinwa Ugochukwu becomes chief executive officer of the Tony Elumelu FoundationUnreasonable is looking for a global portfolio director.. Phenix Capital is hiring an impact fund associate in Amsterdam… The Beeck Center at Georgetown University is bringing on six student analysts for the summer.

April 3, 2019.