ImpactAlpha, September 20 — CNote has raised $7.3 million to expand its network of more than 2,000 CDFIs, low-income designated credit unions and minority deposit institutions. Since it launched in 2017, the Oakland-based impact investing platform has become a go-to for individuals, institutions and corporations that want to put their idle cash to good use. CNote pools funds and invests them in community development financial institutions, or CDFIs, which lend out the funds to increase economic mobility and financial inclusion.
Some 1,900 individual investors, and foundation and corporate investors such as Mastercard, Apple, Netflix and Patagonia use CNote’s cash and fixed-income offerings. The platform reduces the friction points for investors to activate their balance sheets quickly and with minimal effort to support low- and moderate-income communities, people of color and women entrepreneurs through local CDFIs, says CNote’s Cat Berman. The B Corp. is raising capital for a fixed-income fund to support women of color (see, “The LIIST No. 1.”).
The Series A round was led by the American Family Insurance Institute for Corporate and Social Impact, with participation from Artemis Fund, Rebalance Capital, BankTech Ventures, ManchesterStory Venture Fund, CityRock Venture Partners and others. “Capital access is one of the keys to producing generational wealth for underserved communities,” said Rob Kornblum of American Family Insurance.
Balance sheet activism
CNote to date has deployed about $300 million in investments, driven mainly by corporate support following the murder of George Floyd and the mass social protests that followed. Many corporations, says Berman, “see the corporate balance sheet as a tool for real change.”
U.S. corporations are sitting on nearly $6 trillion in cash. “Unleashing even a small percentage of that cash balance sheet for low-income communities for communities of color and more responsible financial services, could be transformative across the U.S.,” she told ImpactAlpha.