The Brief | September 6, 2022

Featured: September’s LiiST of active funds, New Island Capital’s wind down, charter school bonds, lithium battery recycling, food-waste reduction dealflow

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Greetings, Agents of Impact!

Featured: The LiiST

Seven impact funds that are raising capital now. Get off the sidelines. For Agents of Impact, helping impact fund managers – and especially first-time, diverse and emerging managers – spend less time raising money, and more time helping companies succeed, is another way to accelerate impact (see, “Maximizing the impact of catalytic capital when supporting emerging fund managers”). Private fund investments are still generally limited to accredited investors (we are always on the lookout for opportunities for everyday retail investors). But even high net-worth angel investors, family offices, financial advisors and wealth managers may not know which firms and fund managers are in the market seeking capital. Based on public or accessible information, ImpactAlpha and Realize Impact last month published our inaugural LiiST of funds believed to be in active fundraising mode. On September’s LiiST:

  • Amplifica Capital, a gender lens fund in Mexico City, is aiming to make 20 to 25 early-stage tech investments in agriculture, education, clean transition and women’s health in Latin America. “Founders have more awareness now of wanting to have diversity on their cap tables. But there are very few women decision-makers in VC,” Amplifica’s Anna Raptis told ImpactAlpha. The fund’s early portfolio includes financial education and services venture Mujer Financiera, farmer finance marketplace Verqor and long-haul bus service Kolors.
  • Mission Driven Finance is raising a Regenerative Finance Fund to make loans of up to $200,000 to businesses advancing regenerative agricultural practices. San Diego-based Mission Driven says it embraces “an environmental justice lens, including an emphasis on rural, women-led or BIPOC-led organizations.”
  • Seedstars is topping up its International Ventures fund for impact tech ventures in emerging markets. Early investors include International Finance Corp., Symbiotics, and the Visa and Rockefeller foundations (via the Catalytic Capital Consortium).
  • This month’s LiiST also includes Conservation International’s venture fund, CI Ventures; Community Credit Lab’s returnable grants vehicle; E8’s Decarbon8-US Fund and BlackRock’s Impact Opportunities Fund.
  • For more details and contact information, keep reading, “The LiiST: Seven impact funds that are raising capital now,” edited by Jessica Pothering on ImpactAlpha. ImpactAlpha produces The LiiST in partnership with Realize Impact, which helps holders of donor-advised funds make impact investments through philanthropic investment grants.

Dealflow: Family Funds

New Island Capital winds down and moves its assets to Grounded Capital. The San Francisco-based impact investment firm, founded in 2006 by a member of the wealthy Pritzker family, will transfer its assets under management and advisement to Grounded Capital, also in San Francisco. Grounded’s Stephen Hohenrieder has been serving as New Island’s interim CEO since January. “It came as a surprise when the founder of New Island proposed that Grounded manage the existing investment portfolio,” Hohenrieder said in a joint statement. The founder of New Island, who per the firm’s long standing practice was not identified, said, “The motivation for us was always the impact, not the building of a firm,” adding, “Two firms working in precisely the same way does not advance our mission; working together will.”

  • Commercial scale. New Island, which makes investments of $5 million or more in commercial-scale companies and farm and forest ventures, says it has more than 100 active investments and has notched several dozen exits. The firm aims to “structure financing to advance more equitable distribution of the rewards of ownership of natural resources, ethical consumer brands, financial resources and renewable energy production.” Grounded will take over the portfolio on Nov. 1. The statement said most members of New Island’s team have received offers to join Grounded.
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Equitable Facilities Fund closes $230 million in social bonds for underserved charter schools. The New York-based nonprofit social impact fund aims to lower the costs of financing for high-performing public charter schools in U.S. low-income communities. Since it was launched in 2017, through a partnership with Walton Family Foundation, Equitable has deployed $800 million in facility loans to 120 schools in 19 states. Equitable’s current portfolio serves more than 60,000 students, eight out of 10 of whom are from economically disadvantaged backgrounds and identify as people of color. “Our portfolio schools are transforming communities,” said Equitable’s Anand Kesavan. “It’s now clear that investors also see this value.”

  • Innovative finance. Equitable uses a blended philanthropy model that finances its loans using a combination of donor capital and low-cost debt. The nonprofit secured $300 million late last year to finance public charter schools led by people of color in underserved communities. Equitable says it is looking to raise $200 million for a second fund so it can deploy more than $2.5 billion in loans by 2027.
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Dealflow overflow. Other investment news crossing our desks:

  • SK ecoplant, the environmental unit of South Korean conglomerate SK Group, invested $50 million in Massachusetts-based Ascend Elements for EV lithium-ion battery recycling.
  • Novant Health, a network of community-focused hospitals, clinics and outpatient facilities, invested $25.5 million for community impact and health programs in North Carolina.
  • Recurve scored $18 million in Series B funding for “virtual power plants” that are helping reduce stress on the grid during periods of high energy demand.
  • Neutral Foods snagged $12 million from investors including Breakthrough Energy Ventures for its “zero-carbon” dairy products.

Signals: Agrifood Tech

Silver linings in an uncertain fundraising market for food waste innovation. Amid the downturn in venture funding, significant raises for companies in food waste management and upcycling provided positive signals for addressing food waste, reports ReFED’s Alejandro Enamorado in a market update for ImpactAlpha. San Francisco-based Afresh raised $115 million to expand its operating system for stores managing fresh food. The company, like Apeel and Misfit Markets, has a product that could become a standard solution for food retailers to reduce their waste, Enamorado says. Seattle-based Atomo Coffee, which creates coffee without coffee beans, raised $40 million in one of the first significant rounds for an upcycling venture.

  • Investable opportunities. Despite the raises, ReFED projects a down year in food waste funding. “Times of caution may be when funders should be more aggressive in seeking out impact opportunities,” says Enamorado. ReFED has identified $764 million in fundable opportunities this year in food waste solutions (the latest public report can be found here). “There’s always a need for food waste reduction, and during harsh economic times when businesses and individuals may be more cognizant of the waste they generate, there can be more interest too.”
  • Keep reading, “Silver linings in an uncertain fundraising market for food waste innovation,” by ReFED’s Alejandro Enamorado on ImpactAlpha.

Agents of Impact: Follow the Talent

John Podesta, who served both Bill Clinton and Barack Obama, will return to the White House as a senior adviser to help implement the $369 billion federal climate-change bill signed by President Joe Biden last month (see, “Eight ways the Inflation Reduction Act is resetting the climate table”)Women for Women International seeks a mid-level gifts officer in Washington, D.C… The Sobrato Organization is looking for a senior investment associate in Mountain View, Calif. 

RS Group, a Hong Kong-based family office focused on sustainable development, is recruiting a director and an associate director of investments… Stanford Impact Labs seeks a full-time program manager… Women-led nonprofit Zebras Unite will accept board nominations and applications through Tuesday, Sept. 20… Impact Investors Council is hosting Prabhav (Impact) 2022 in Delhi, Sept. 12-13.

Thank you for your impact!

– Sept. 6, 2022