Democratizing impact investing, gender-equity ETF, regenerative economy, digital solutions for…



Greetings, ImpactAlpha readers!

#Featured: ImpactAlpha Voices

Democratizing — and localizing — impact investing in 2018. Invest in what you know, right? For smaller investors who know their own communities best, it’s been hard to follow Warren Buffett’s famous advice. Now, a range of new approaches and products is allowing individuals to invest directly in their peers and communities. Democratizing the ranks of those who allocate capital is also democratizing access to that capital.

Amy Cortese, the journalist and author of “Locavesting, The Revolution In Local Investing And How To Profit From It,” has been tracking the turning tide. Take the JOBS Act, the Obama-era legislation that allows citizens to invest in small and local businesses. In the first full year since the new rules went into effect, such small-dollar, crowdfunded investments raised close to $55 million for more than 177 ventures. Women and minority-led ventures were more successful at meeting their equity crowdfunding goals than their white male peers.

Read, Democratizing — and localizing — impact investing in 2018,” by Amy Cortese on ImpactAlpha.

Democratizing — and localizing — impact investing in 2018

#Dealflow: Follow the Money

Edtech venture for English learners gets $13.9 million boost. The funding round for Boston-based Ellevation Education was led by Reach Capital. With the move, Reach joins Ellevation’s roster of big-name tech investors: Emerson Collective, Zuckerberg Education Ventures and Omidyar Network backed its $6.4 million funding round in 2016. Ellevation Education supports teachers working with the 10% of K-12 students in the U.S. who are non-native English speakers. Its software helps teachers track student progress in English.

Fresh Coast Capital raises $1.25 million for green municipal water management. Chicago-based Fresh Coast Capital raised the money from the Kresge Foundation to help fill the projected $105 billion funding gap between now and 2025 in U.S. water and wastewater infrastructure. The money is for green water-management projects like rain gardens and bioswales and came as a $500,000 grant and a $750,000 program-related investment. Fresh Coast Capital launched in 2014 out of the Morgan Stanley Sustainable Investing Challenge with a pitch for revitalizing brownfields.

Investors put $19.3 million in StartUp Health’s second fund. The New York-based company is providing early funding and a network for healthcare entrepreneurs tackling problems from women’s access to care to mental health and happiness. Its latest round is backed by Chinese financial-services firm Ping An Global Voyager Fund, U.S. healthcare company GuideWell, and Masimo Corporation. Other partners and investors include Steve Case, Mark Cuban, Allianz, GE Ventures and Kaiser Permanente. StartUp Health works with 200 companies in 19 countries.

UBS introduces “gender equity” exchange traded fund. The Swiss bank is using consulting group Equileap’s index of the 100 companies considered most progressive on gender equality, based on 19 criteria. According to a report in Wealth Manager, the criteria include gender balance among company leaders, equal pay, and work-life balance. Lyxcor, QBE and Evolve also use Equileap’s index for gender-based financial products, including QBE’s over-subscribed gender-equality bond. Last month, investment manager Impact Shares partnered with the YWCA to launch an NYSE-listed gender ETF. The UBS fund, Global Gender Equality Ucits ETF, is listed on the SIX Swiss Exchange.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to thebrief@impactalpha.com.

#Signals: Ahead of the Curve

Talkin’ about regeneration. Sustainable practices can prevent the destruction of ecosystems. Regenerative approaches can restore land — and communities — that are already degraded. Take a look at Ejido Verde, an initiative in the Mexican state of Michoacán. An ejido is a piece of communally farmed land, and the green enterprise is turning once-degraded lands into pine forests. With 3,000 of a planned 24,000 acres under cultivation, the trees produce resin for export, mitigate climate change and generate wealth for the indigenous Purhépecha community. The firm is expected to deliver an estimated 13% internal rate of return to its investors. Proponents are touting Ejido Verde as a prototype of a regenerative approach that can reverse degradation while providing long-term revenues for marginalized communities.

SVX Mexico, an impact-investing consulting firm, and UNDP’s Biodiversity Finance Initiative, have identified 30 companies in Mexico, including Ejido Verde, that are working in agriculture, forestry, fishing, cattle ranching, tourism and smart cities. “We are taught of economics as a system based in scarcity, where individuals need to compete for resources,” Laura Ortiz of SVX Mexico, told ImpactAlpha. “For the regenerative economy we need to learn about the paradigm of unity, where the economic system is based on abundance.”

Learn more about Ejido Verde and other regenerative models at Regen18 in May in San Francisco. Organizers of the four-day festival include Kevin Jones, Rosa Lee Harden and Tim Freundlich, all co-founders of SOCAP, and author and activist Marc Barasch.

Regenerate 2018

#2030: Long-termism

Digital solutions for the global goals. The use of smart sensors and artificial intelligence in infrastructure, industry and homes could cut carbon emissions by 12 gigatons by 2030 by enabling more efficient allocation of energy, water and other raw materials. By 2050, digitally intelligent autonomous vehicles are projected to cut fuel consumption from cars by nearly half. The market for wearable health devices, already $13 billion, is projected to grow to $34 billion by 2020. Now scale that to 2030.

A new report from the 2030Vision project forecasts the market opportunities for tech solutions to the Global Goals. The report provides a useful look at how technology might affect different sectors. For example, tech for tracking food products through the supply chain — such as sensors and blockchain — will “allow food to be produced based on demand and allocated where needed, as well as guaranteeing sustainable ingredients sourcing” as demand for food increases with incomes and population growth, the report says. Already IBM, Unilever, Nestlé and Walmart are working together on using blockchain to track food along supply lines.

The spread of digital technologies is opening access to education, energy and finance around the world. Less clear are the possible impacts on food, employment and health. Still, technology is bound to play a large role in achieving the 2030 Goals and an essential one in unlocking the economic activity that would trigger $12 trillion a year in revenue and cost savings and 380 million new jobs by 2030, by one estimate.

Onward! Please send news and comments to TheBrief@impactalpha.com

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