Fintech for the next billions, Aavishkaar’s Bharat fund, public gender-lens vehicles, financing…



Greetings, ImpactAlpha readers!

#Featured: ImpactAlpha Original

A gateway to financial services for the world’s next billions. Say you’re a huge asset manager looking for growth. You might want to keep tabs on business models and innovations in financial services for the next billions of customers around the world. Or say you’re one of the world’s largest foundations, pledged to improving lives for the poor. You might want to hatch a whole flock of digital-native companies delivering “fintech” to people climbing out of poverty.

Cue JPMorgan Chase & Co. and the Bill & Melinda Gates Foundation, which are backing the multi-million dollar Catalyst Fund to support emerging-market fintech firms that are reaching low-income customers. The high-leverage strategy: Help scale high-quality, low-cost financial services — bill pay, cash transfers, credit accounts, remittances, insurance — with business models suited to emerging consumers around the world. In aggregate, the next four billion customers represent tremendous purchasing power and pent-up consumer demand.

Read, “The Catalyst Fund’s gateway to financial services for the world’s next billions,” by Dennis Price on ImpactAlpha.

The Catalyst Fund’s gateway to financial services for the world’s next billions

#Dealflow: Follow the Money

Aavishkaar closes $95 million for India’s largest impact fund. Aavishkaar-Intellecap Group reached the first close in its planned $200 million Bharat Fund, Livemint reports. Bharat Fund could double Aavishkaar’s fundraising to date. Aavishkaar’s five previous funds have cultivated early-stage social startups in India; half of the Bharat Fund will back later-stage companies. Aavishkaar has identified three companies in waste management and financial services in which to invest roughly $20 million each. The fund is so far backed by $25 million from CDC, the U.K.’s development finance institution, several Indian family offices, the Small Industries Development Bank of India, and the Indian National Bank for Agriculture and Rural Development. Aavishkaar-Intellecap Group is hosting its 9th Sankalp Forum in Mumbai next month (see #Signals below).

Norway, Unilever plan $400million climate resilience fund. This season’s hurricanes have made the case for climate-resilience investing. Details are sketchy for the new fund, announced at COP23 in Bonn, Germany, but the aim is to back businesses committed to “high productivity agriculture, smallholder inclusion and forest protection.” Stockholm Resilience Centre’s Johan Rockström explains, “Investing in resilience [enables] communities to navigate rising climate shocks and stresses [and] reduces climate risks by safeguarding carbon sinks and unleashing novel thinking on transformations to diversified fossil-fuel free societies.” Rockefeller Foundation’s 100 Resilient Cities initiative is backing initiatives like flood-protection design in New York and disaster alerts in Colombia.

Techstars and Nature Conservancy to launch sustainability accelerator.Mark Tercek of The Nature Conservancy says the effort will identify “potential technology breakthroughs that will accelerate protection of nature at scale,” particularly in food production and water use. Last month, Techstars announced the launch its first impact acceleration program, focusing on social startups in financial services, healthcare, education, agriculture and energy. The Sustainability Accelerator plans to enroll 30 startups over three years. Applications open in January for the July program.

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

#Signals: Ahead of the Curve

Nearly two-dozen public gender-lens investment vehicles hold $910 million. That’s up 41% from $645 million in 19 vehicles last year, according to a new analysis from Veris Wealth Partners and gender-lens investing expert, Suzanne Biegel. The public vehicles include ETFs, mutual funds, CDs, and corporate and government bonds that invest in companies with women in leadership roles and those that specifically improve the lives of women and girls. More than one-third of the assets, or $329 million, are held in State Street’s Gender Diversity Index ETF, or SHE, seeded in early 2016 with $250 million from the California State Teachers Retirement System. Another $146 million is held in PAX Global Women’s Index Fund. Other asset managers in the roundup include Community Capital Management ($32 million), Breckinridge Capital Advisors ($19 million) and Nia Global Solutions ($15 million). Biegel and Wharton Social Impact initiative recently released a separate list of 58 venture capital funds with $1.3 billion in assets that are betting on women. Together, the tally of public- and private-equity assets invested with a gender lens tops $2.2 billion.

“Setting new social defaults” at the 9th Sankalp Forum in Mumbai. While Aavishkaar is raising its Bharat Fund (see #Dealflow above), its Intellecap advisory arm is helping build a deal pipeline. Next month, Aavishkaar-Intellecap will convene more than 900 entrepreneurs, innovators, investors, corporates, academics and policymakers for the 9th Sankalp global summit, Dec. 7–8. Founder Vinet Rai and his team “supply hand-holding, nurturing, relentless networking and a full-spectrum of capital services to small and growing businesses,” ImpactAlpha wrote last summer when the group was named the “Market Builder of the Year” by the Global Social Impact Investment Steering Group. The theme of this year’s conference, “Setting new social defaults,” is aimed at establishing universal access to food, healthcare, education and livelihoods. As a media sponsor, ImpactAlpha is pleased to offer readers of The Brief a 20% discount with the code ALPHA20. Register here.

#2030: Long-Termism

Financing the 2030 water-infrastructure finance gap. Water demand could exceed supply by 40% in 2030. Planned global investment in water infrastructure is estimated at $10 trillion by then, but that still leaves a gap of about $3 trillion for needed improvements in water supply, wastewater, recycling and reuse. According to IFC’s ‘Creating Markets for Climate Business’ report, public financing is unlikely to be available at a scale to adequately meet these needs. The report says that private sector could provide up to half of the investment required.

A few opportunities: Water equipment and water tech is growing, especially in large emerging markets. The water recycling and reuse market more than doubled, to $23 billion in 2013, and is continuing to grow. The market for water-smart technologies is expected to grow from about $8 billion in 2016 to more than $20 billion in 2021.

The Global Innovation Lab for Climate Finance is piloting a Water Financing Facility to mobilize investments from pension funds, insurance companies and other institutional investors. A pilot in Kenya aims to issue bonds for water and sanitation projects. The lab is targeting low-carbon, climate-resilient infrastructure and utilities. A carbon-neutral water sector could deliver up to 20 percent of the carbon mitigation pledged under existing national plans, according to the International Water Association.

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

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