Greetings! Here’s the latest impact investing deal news.
Holding company Secha Capital takes a stake in Rush Nutrition. Boring sectors are exciting to Secha Capital. The South African “micro-private equity” firm launched with 35 million rand ($2.7 million) to invest in small agri- and consumer goods businesses with solid growth and job creation potential. It made its first investment in beauty products company nativechild in 2017. Its sixth investment is Rush Nutrition, a female-run, healthy snacks company. Secha’s investment will provide sufficient working capital to bridge the gap between production and banking revenue from sales. Secha’s Kuhle Mnisi joins the Rush team as COO. Rush will also get a financial boost from South Africa’s Jobs Fund to temporarily cover eight new employee salaries.
- Holding company. Secha makes equity investments off of its own balance sheet, without the timeline pressures of an investment fund, and supplies the team with operational and management support. Secha says this structure allows it to make patient investments and ensure that long-term growth objectives are aligned (see, “The New Alternatives: Holding Companies that Build Assets and Impact of ‘Infinite Duration’“). Other impact and mission investors building hold-cos rather than funds include i(x), CoPeace and The Craftory. (Further reading: “Breaking the chains of the 10-year fund is harder than it looks.”)
- Jobs as impact. In a country with one of the highest unemployment rates in the world, job creation is Secha’s primary impact lens. South Africa’s small businesses account for 90% of formal businesses, but few are able to expand beyond their founding teams.
- Dig in.
Everytable scores $2.5 million to back under-represented franchise owners. The L.A.-based healthy and affordable restaurant chain is looking to open 25 new branches run by entrepreneurs of color in underserved neighborhoods. The financing comes in the form of program-related investments (PRI) from the Annenberg Foundation and the California Wellness Foundation. Everytable previously secured a $1.5 million PRI from the Kellogg Foundation to pilot the franchise model.
Chicago gets backing from Melinda Gates to support women in tech. Gates’ Pivotal Ventures committed $50 million to the Gender Equality in Tech Cities initiative to boost women’s leadership and participation in emerging tech hubs. The initiative will support Chicago and two other cities over five years.
Atlanta affordable housing fund will track social impact. Commercial real estate leaders are planning to raise a $25 million Atlanta Affordable Housing Fund to offer low-cost financing to build or preserve 1,500 affordable rental units. The fund will track social as well as financial returns.
–Feb. 3, 2020