Dealflow | December 3, 2015

DealFlow Nov. 25-Dec. 4: ImpactAlpha’s Roundup of Investments, Raises and Exits

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Celebrity Investors Back Pay-As-You-G0 Solar in Africa. The Kenyan solar energy venture M-Kopa has pulled in $19 million in new financing from celebrity investors. The investment was led by Generation Investment Management, an investment firm founded by former U.S. Vice President Al Gore and his partner David Blood. Sir Richard Branson and the Case Foundation also backed the deal. M-Kopa was started in 2012 and has brought solar-based energy to more than 250,000 households in Kenya, Uganda and Tanzania. Its website claims it is adding 500 new households to its service per day. The latest round of investment will be used to add new products and expand its international operations and management team. The Dar Es Salaam-based venture has previously raised $64 million from investors including Bill & Melinda Gates Foundation, Blue Haven Initiative and Lundin Foundation.

dealflow…While A Rival Gets A Major Boost. Tanzanian solar energy startup Off Grid Electric has raised $25 million to expand services to Rwanda. The Series C financing was backed by DBL Investors, Zouk Capital, Vulcan Capital and SolarCity, with $2 million in commitments coming from a new investor, Energy Access Ventures, from Kenya. Off Grid Electric has raised $55 million in debt and equity since it was founded in 2011. Off Grid Electric aims to bring power to one million Tanzanian homes by 2017, primarily in rural areas, where 70 percent of Tanzania’s nearly 50 million people live. Less than seven percent of rural residenta have access to electricity, according to Lighting Africa.

Bridges Ventures Backs UK Early Childhood Education Fund. The London Early Years Foundation (LEYF) has raised £1.5 million ($2.25 million) from impact investment firms Big Issue Invest and Bridges Ventures to grow its network of childcare nurseries in London. Last year, it raised £1.25 million from the Investment & Contract Readiness Fund, a £10 million fund backed by the U.K. Cabinet Office that seeds promising social ventures with “capacity building” grants. LEYF will use the new funds to reach 5,000 children in London. The 112-year-old charity serves more than 3,000 children around the city, nearly half of whom attend for free, by using income from profitable nurseries to subsidize facilities in lower-income areas. LEYF’s was supported by impact capital advisor, ClearlySo.

African Impact Crowd Funding Site Goes Live. An equity-based crowd-funding platform has launched to back impact ventures and boost small and mid-size business financing in Africa. Malaik will focus on seed-stage investments of between $200,000 to $2,000,000 for African companies focused on job creation, social issues and building or improving infrastructure. “Lead investors” will negotiate investment terms and conduct due diligence; once that investor commits at least 25 percent of a company’s round, the deal will be listed openly on the site. Malaik will track impact and financial metrics; it says it won’t collect fees on listed deals or exits.

Green Bonds to Finance PACE Retrofits. The country’s largest provider of financing for residential PACE financing, Renovate America is rolling up existing deals and repackaging them as “green bonds.” The financing firm has provided over $1 billion in loans for homeowners to make energy and environmental efficiency upgrades to their homes. Renovate America’s new securitized PACE bond issue amounts to just over $200 million. Calling it a “green bond” could attract socially and environmentally conscious investors, as Renovate America has previously done four other PACE bond securitizations. The latest issuance was underwritten by Morgan Stanley, which has led around 30 green bond transactions and issued its own $500 million green bond earlier this year. It has been given an AA rating by rating agencies Kroll and DBRS.

IFC Lists First African Green Bonds. The International Finance Corporation is issuing its first green bond in an African currency, in its bid to expand environmentally-minded investing in emerging markets. The World Bank Group member will list the 1-billion South African Rand ($71 million) bond offering on the Johannesburg Stock Exchange. The main investor is South African bank FirstRand. The 9-year bonds are being managed by Rand Merchant Bank and offer a return of 8.7 percent. Proceeds will be used to “support investments in renewable energy, energy efficiency, and other areas that reduce greenhouse emissions,” according to the IFC’s announcement. The IFC has previously issued green bonds in Chinese and Indian currencies. In all, it has raised close to $4.5 billion from its Global Green Bond Program in the past five years.

Billionaires Back Clean Energy. Bill Gates announced a major new investment initiative intended to catalyze clean energy by backing early stage innovation. The Breakthrough Energy Coalition – for which the investment size and structure is yet to be determined – has been backed by Mark Zuckerberg (Facebook), Sir Richard Branson (Virgin Group), Jack Ma (Alibaba), Vinod Khosla (Khosla Ventures) and Meg Whitman (HP), among others. The Coalition intends to serve as catalytic capital for companies facing a funding gap between the stages of early research and market launch of their products. It pledges to “take a flexible approach to early-stage work, providing seed, angel, and Series A investments, with the expectation that once these investments are de-risked, traditional commercial capital will invest in the later stages.”

Facebook CEO Forms a Mission-Driven LLC. The founder and CEO of Facebook, Mark Zuckerberg announced that he and his wife, Priscilla Chan, were founding the Chan Zuckerberg Initiative, a charity-focused limited liability company, following the birth of their daughter, Max. Zuckerberg said he would sell or gift up to $1 billion of his personal stock in Facebook to the cause each year, pledging to give away 99 percent of his shares, valued at over $45 billion. Read more on the Chan Zuckerberg Initiative here.

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DealFlow is ImpactAlpha’s weekly roundup of what, where, how and why impact capital flowed each week…See more impact deals in ImpactAlpha’s DealFlow section. And send your dealflow news to [email protected].

Image: M-Kopa