Find us at SOCAP, fintech and edtech raises, racial-equity growth market, big brands in 2030



Greetings, ImpactAlpha readers!

#Featured: SOCAP17

The social capital markets’ annual meeting. It’s not your grandfather’s business convention. Next week’s 10th annual SOCAP will once again gather the many tribes of social impact. The ImpactAlpha team will be on the scene at Ft. Mason in San Francisco to make sense of the movement. We’re leading a few panels — and hosting a happy hour. Say hello and ask for a collector’s edition Agent of Impact button.

  • Accelerating the accelerators. A tool to help entrepreneurs find the right program — quickly! — will be launched by Conveners.org, Sphaera, and ImpactSpace (ImpactAlpha’s open database). Accelerator managers can check it out at the workshop Tuesday, Oct. 10, 9am to 4pm. The public can see the tool at the Collaborate or Die panel Thursday, Oct. 12, 5:15pm to 6:15pm.
  • Solutions journalism. Impact investors look for social and environmental solutions, and so do a growing number of journalists. ImpactAlpha’s David Bank leads a workshop on how to spot them. Tuesday, Oct. 10, 12pm to 2pm (offsite). Register here.
  • Meet the media happy hour. Lift a cold one and drop your tips and scoops to the teams from ImpactAlpha, NextBillion and Kyle Westaway’s Weekend Briefing. Wednesday, Oct. 11, 6:15pm to 7:45pm. RSVP here and we’ll let you know where.
  • Policy innovation for racial equity. Racial equity is a growth market (see #signals below). David Bank will talk with National Cooperative Bank’s John Holdsclaw and Elizabeth Jaff of Lab736 about what’s working and why. Thursday, Oct. 12, 1:30pm to 2:30pm.

#Dealflow: Follow the Money

Soros Fund backs Ualá’s mobile banking app. In Argentina, public distrust of banks runs high. More than half of Argentines get paid in cash and don’t have a bank account. Buenos Aires-based Ualá offers a smartphone app that includes mobile deposit accounts and prepaid Mastercards. Through Ualá’s app, the card can be loaded with cash and used for paying bills, ATM withdrawals and money transfers at Western Union; both the accounts and card are free. The company aims to have 10,000 users by yearend. The funding, amount undisclosed, was backed by Soros Fund Management, General Catalyst Partners, and Jefferies Group, Bloomberg reports.

Learning-software company Moodle raises $6 million. The Australian company, which started in 2011, counts more than 118 million users of its learning-management software in businesses, organizations and schools, including Open University in the U.K., the United Nations, World Vision International, and the U.S. Department of Defence. France-based Education for the Many is committing $6 million to expand Moodle’s free, open-source software. “Education of the largest number of people will be the number one solution to living better together,” says Julien Leclercq, CEO of Education for the Many’s parent organization, the Leclercq family office.

Capitalworks lands $40 million for investment in Africa. The South African investment firm makes long-term equity investments in mid-size companies across sub-Saharan Africa. The funding from CDC Group, the U.K.’s development finance institution, is part of Capitalworks’ planned $300 million raise. “Many mid-sized African businesses struggle to raise the long-term capital they need to grow into the type of national and regional champions that bring growth and jobs,” says Murray Grant, a CDC managing director. The CDC backed a similar strategy in Sierra Leone, committing $20 million to investment firm Solon. The South African Government Employees Pension Fund, Africa’s largest, is also an investor in Capitalworks.

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

#Signals: Ahead of the Curve

Racial equity is a growth market. Companies that promote racial equity — in the workplace, in product design, in governance — will gain a competitive advantage over their peers. By 2044, people of color will be the majority in the U.S. Wealth and other disparities along racial lines keep tens of millions from productively engaging in the economy. The Competitive Advantage of Racial Equity, a new report from consulting firm FSG and research institute PolicyLink, calls the unlocking of that untapped economic potential “one of the biggest opportunities of our time for driving innovation and growth.” Consider:

  • Supermarket chain ShopRite tapped a $250 million market with high-quality, fresh produce and other groceries for 250,000 people, mostly of color, in Philadelphia’s “food deserts.” The grocer introduced health clinics in its stores to provide more value to low-income customers.
  • PayPal found a $3 billion market in small-business loans, one-quarter to borrowers in majority-minority counties. The online-payments company uses sales history instead of credit scores to assess credit risk. Repayment based on future sales reduces the borrowers’ risk of default.
  • Venture capital firm DBL Partners has outperformed with investments in companies that create jobs in low-income communities and those that serve mostly minority customers, including career site The Muse.

Reconciling “rising diversity amidst persistent racial economic exclusion,” the report says, is the core business challenge facing U.S. companies.

Dive deeper. The W.K. Kellogg Foundation is curating a racial equity track at next week’s #SOCAP17, including: The Business Case for Racial Equity, The First Mile: Racial Equity in Capital Deployment, Formerly Incarcerated: Connecting Talent to Opportunity.

#2030: Long-termism

The most valuable brands in 2030. Every era spawns its iconic brands. Sears, Kodak or Blockbuster, anyone? By 2020, the Millennial generation, the largest in history, will control something like $24 trillion of wealth. That’s about 1.5 times the size of the U.S. economy in 2015, according to Deloitte. Their spending and investment will drive the brands that dominate the cultural landscape.

Despite the hoopla, “purpose” is not enough, according to the annual World Value Index, which attempts to measure its brand value. Boomers favored Newman’s Own (the №7 brand for their age category), and gen-Xers are still partial to Levi Strauss (№35). Both brands hold less appeal to millennials, who rank them №81 and №91, respectively. Brands with strong mission statements, like Honest Company (“Creating a culture of honesty”) and Starbucks (“…a positive impact on the communities we serve”) scored significantly higher among millennials than boomers.

So what’s the next big thing? Meaning. Companies have to connect their mission with the products they sell, says Sebastian Buck, CEO of Enso, an agency that produces mission-driven branding and which commissioned the survey. Tech brands like Twitter, Spotify, Kickstarter, and Snapchat register highly with millennials, but haven’t broken into the top 10. The brands whose mission and purpose are perceived as creating the most world-value: Goodwill, Girl Scouts of the USA, Amazon, Save the Children, Google, World Wildlife Fund, YMCA, Microsoft, Dove and Subway. This year’s list seems, well, transitional. Let’s check back in 10 years or so.

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

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