Chan-Zuckerberg’s portfolio, JPMorgan’s clean billions, Patamar’s livelihood thesis, care-bots…



Hello ImpactAlpha readers!

#Featured: ImpactAlpha Original

How Priscilla Chan and Mark Zuckerberg are investing their social-change billions. If and when the Chan-Zuckerberg Initiative becomes one of the biggest private social-change funders in history, these early days will be seen as signals of their intentions — and their methods. The Facebook founder and his wife have pledged to eventually commit 99% of their shares in the company to the LLC, a structure that, unlike a foundation, allows the firm to make investments and acquisitions, as well as grants, and to influence policy. Their intentions are apparent in a series of deals since the initiative was announced in late 2015. The biggest bets have been in science and medicine (a $3 billion commitment “to end all disease” anchored by the $600 million pledge to Biohub at UCSF) and to education, with an emphasis on tech-driven learning for all children. Coming up from behind appears to be affordable housing and social justice. Axios released a report that nicely tops up ImpactAlpha’s ongoing coverage of CZI’s activity.

Read about how Chan and Zuck are investing their social-change billions, by David Bank and Dennis Price on ImpactAlpha:

How Priscilla Chan and Mark Zuckerberg are investing their social-change billions

#Brief Quiz: №25

From Rwanda to Cancun to China, via Peterborough: The Brief Quiz is all over the map. This week we learned that the US military spends $41.6 million a year on Viagra. Let’s leave it at that. Test your impact IQ. Take the Brief Quiz №25, by Jérôme Tagger:

From Rwanda to Cancun via Peterborough: The Brief Quiz №25 is all over the map

#Dealflow: Follow the Money

J.P. Morgan will facilitate $200 billion in clean-energy financing by 2025. The bank is making what it calls “the largest commitment by a global financial institution” to facilitating clean energy financing. That bank did about $15 billion in such deals in 2015, including green bonds, tax-equity financings, project financing and even IPOs; the new pledge would boost that to about $22 billion a year. That’s a far cry from the “clean trillion” in investment (from about $300 billion now) needed to meet the carbon-reduction goals of the Paris climate agreement. (Listen to ImpactAlpha’s podcast “Why is cleantech still a dirty word for investors?”). The bank also committed to power its own operations with 100% renewable energy by 2020. That includes direct purchasing agreements with renewable energy providers to power its 75 million-square-foot property portfolio. Excess power purchased will be sold on to other companies, with J.P. Morgan’s commodities group acting as an intermediary. Goldman Sachs announced a similar strategy last month when it cut a power purchasing agreement with a wind farm in Scranton, Pennsylvania.

Indonesian peer-to-peer lending startup Julo raises seed round. More than 60% of Indonesia’s 260 million people don’t have a bank account. Julo’s mobile platform connects under- and unbanked people with institutional lenders to obtain unsecured personal loans. Like other peer-to-peer lending platforms and financial services for underserved customers, Julo uses non-standard data to assess creditworthiness. With a large population at the base of the financial pyramid and low access to consumer credit, “Indonesia is the perfect seedbed for the right-minded fintech lending company to flourish,” says founder Adrianus Hitijahubessy, who developed artificial intelligence-driven credit scoring processes in Silicon Valley. Julo, founded in 2014, wants to reach 10,000 users in the next year, up from “thousands” today. The size of the financing was not announced; it included Singapore-based venture capital firm East Ventures, tech fund Skystar Capital and Indonesian venture capital firm Convergence Ventures.

Patamar Capital is the new name of Unitus Impact and its livelihood impact fund. The San Francisco venture capital firm’s $45 million fund has invested in 14 companies in a half-dozen countries in southeast and south Asia. It launched the “livelihood” fund to prove that raising incomes of the poor can be a profitable investment thesis among private investors, not just development financiers. Earlier this year, the firm led Singapore-based mClinica’s $6.3 million funding round to connect pharmacies with better global health data. Vasham, which provides fair market loans to farmers in Indonesia is an example of what Patamar is looking for: supply chain improvements that lower costs, raise productivity and generate premium prices for producers; and distribution improvements that provide high-value, affordables services for low-income workers. Other investments include Ruma, Micro Benefits and Topica Edtech Group. The new name distinguishes Patamar from other members of the Unitus family and signals its “evolution” as an investor in early-stage, high-growth companies in growth markets. The firm says its impact mission has not changed. “Patamar Capital exists to open up better opportunities for Asia’s underserved communities so they can improve their lives,” reads the firm’s mission statement. Patamar CEO Geoff Woolley said the firm would continue to “help improve the lives of low income populations in Asia.”

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

State Street’s “Fearless Girl” was more than symbolic. Since the $2.6 trillion asset manager installed a bronze statue of a girl staring down the Wall Street bull, the firm has actually stared down companies lacking gender diversity on their boards. The Boston-based firm has voted against the re-election of the chair or other senior members of male-only boards 400 times so far in 2017, reports Bloomberg. “In some cases we had to agree to disagree and in some cases we got commitments to enhance board quality by increasing diversity,” said State Street’s Rakhi Kumar. “We will work with companies, but of course not forever.” Kumar said research shows companies with diverse boards perform well. (Peer reviewed studies on the subject cast doubt on that proposition, however; listen to ImpactAlpha’s podcast, “What’s the value of gender diversity, anyway?”) The world’s biggest asset manager, BlackRock, has said it it has supported nine out of 10 shareholder proposals to increase board diversity this year and voted against nominations at five companies with male-only boards.

#2030: Long-Termism

Care-bots: Will we rely on robots for that human touch? Elder care should be one of the growth industries of the future, as the number of U.S. adults over 65 grows to 80 million by 2050. But we’re already short of caregivers, and don’t pay many of the ones we have. In 2015, 43.5 million caregivers in the U.S. supplied unpaid care to an adult or a child in 2015. According to the AARP, the estimated economic value of their unpaid contributions was approximately $470 billion in 2013.

Other countries facing a shortage of young people to take care of their old have turned to automation. Japan, facing an especially acute crisis, is ahead of the curve in developing humanoid robots to care for its elderly population. China, feeling the effects of the one-child policy and the world’s largest producer of industrial robots, is currently running dozens of field tests at senior-care facilities, and plans to turn “care bots” into a $4 billion industry in the next three years. The New America Foundation takes a deep dive into the issues in a package on “The Care Economy in 2030.”

How much of caregiving can and should be automated? “The way humans relate to one another is one of the key things that cannot be automated,” said Kristin Sharp, executive director for the Shift Commission on Work, Workers and Technology. “It can’t be digitized. You can’t predict a human interaction and how it will go, or create the sense of empathy humans have with one another.”

But robots already are better than humans at many routine physical activities — for example, reminding patients to take their medication and calling their doctor if something goes awry, and can even detect a patient’s emotional state by observing combinations of muscle movements on a person’s face. A recent McKinsey report concludes that almost every occupation has some automation potential, and that automation has the potential to raise global productivity growth.

Most employers will use robots to augment, rather than replace human workers. Perhaps this is the key to the future of caregiving, as well. If mundane yet critical tasks like doling out medication are relegated to robots, more humans could step up to the empathy required, and perhaps even get paid for it.

That’s a wrap. Have a great weekend! Please send any news and comments to TheBrief@impactalpha.com.

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