The Brief | December 23, 2020

Housing as healthcare, palatable price points, COVID capital for small businesses in the U.K. and India, alt-credit scoring, Bill Gates’ dose of optimism

The team at


Greetings, Agents of Impact! 

Featured: Impact Voices

Dear Secretary of Housing and Urban Development. A Black real estate developer in Pittsburgh has some advice for HUD Secretary-designate Marcia Fudge, a congresswoman from Ohio. Joshua Pollard, founder of mission-driven real estate investment firm Omicelo, has been homeless and on Section 8 vouchers – and the leader of the housing research team at Goldman Sachs. “Black Americans have no desire to remain only the recipients of affordable housing, we want to build it and support it,” Pollard writes in a guest post on ImpactAlpha. He urges the incoming head of HUD to take five actions to disrupt the multi-generational poverty that traps many Black families. 

  • Housing is healthcare. Bringing housing and healthcare systems together could save the country billions or even trillions of dollars, and stem disease, including the spread of COVID-19. 
  • Accountability in Opportunity Zones. The new HUD Secretary will chair the White House Opportunity and Revitalization Council, created by Trump to recommend policies for Opportunity Zones and other economically distressed communities (see, “Opportunity Zone capital flows to real estate but not to small businesses – or impact). Stronger reporting requirements around OZs and expanded eligibility to enable community members to participate could help reverse the growing wealth gap. 
  • Private sector collaboration. Microsoft has invested $750 million in affordable housing in Greater Seattle. UnitedHealth Group is giving homes to the homeless because it’s financially advantageous to do so. And Pollard’s firm, Omicelo, is partnering with BNY Mellon to create a financial tool to help community members purchase small stakes in investment properties. “There are many well-intentioned humans of every creed and color in the private sector,” he says, “who simply want to create strong, sustainable, inclusive communities and quality affordable homes for all – which is HUD’s mission, after all.” 
  • Keep reading, “A Black developer’s advice to incoming HUD Secretary,” byJoshua Pollard on ImpactAlpha.

Aiming high by pricing low: How entrepreneurs can tap the mass market for impact at scale. Emerging market entrepreneurs have to thread the needle when pricing their products and services: too low, and they won’t generate the revenues and profits they need to grow; too high and they’ll price themselves out of the very population segments they are targeting for impact. “A common error for entrepreneurs in emerging markets and Silicon Valley alike, who are often members of the same well-to-do community, is to assume that the price point reasonable within their social circles is the right one for the mass-market consumer,” writes ImpactAlpha contributing editor Dmitry Fotiyev. He tracks the pricing challenges faced by Tangus, an innovative street food service in Dakar, Senegal that offered $2 sandwiches. That was cheaper than elite shops, but double the price of other street food. The challenges of pricing may seem insurmountable, he writes, “but millions of small- and medium-sized enterprises and micro-enterprises around the emerging economies make it work, generating massive impact for society.”

  • Aligned capital. What they often lack is management acumen and funding to scale. “That is exactly where impact investors come in with capital and technical assistance,” writes Fotiyev, a partner at Brightmore Capital in Senegal. “It is a truism of emerging markets impact investing that scalable businesses are the most impactful, and impactful businesses are the most scalable.”
  • Palatable price points. For entrepreneurs, going upmarket may boost margins and hold promise for the revenue growth needed to scale, says Fotiyev. “But that initial success can just easily represent an echo chamber of early adopters who represent only a fraction of the addressable clientele – and only a fraction of the potential impact.”
  • Keep reading, “Aiming high by pricing low: How entrepreneurs can tap the mass market for impact at scale,” by Dmitry Fotiyev on ImpactAlpha

Dealflow: Follow the Money

Northern Arc Capital scores debt financing to serve India’s underbanked. The East India-based non-banking finance company provides access to debt for underbanked individual borrowers and micro- and small enterprises. The Asian Development Bank’s $40 million loan is part of its $20 billion COVID response package for developing countries in Asia and the Pacific. Northern Arc will use the financing to boost lending to affordable housing companies, small businesses, and other Indian borrowers.

  • Catalytic capital. The ADB touted Northern Arc’s work with “the most impacted segment” of micro-, small- and medium-sized enterprises and financial institutions. ADB’s Christine Engstrom said the project will help India “kickstart credit flow to this segment of the economy.”
  • Dig in

Liberis secures £70 million in debt to finance small businesses in the U.K. Like small businesses around the world, small businesses in the U.K. are struggling to survive the impact of COVID. London-based Liberis has raised debt funding of £70 million ($94 million) “to fuel company growth, launch new products and markets, and provide additional customer financing solutions.” British Business Investments, Paragon Bank, BCI Europe and Silicon Valley Bank provided the financing. The company has raised €200 million in equity and debt investments to date. 

  • Loan origination. Through Liberis’ digital platform, small businesses can secure loans ranging from £1,000 to £300,000. Repayments are based on how much borrowers earn through credit and debit card sales. Liberis has originated over £500 million for 16,000 small and medium-sized enterprises across Europe, the U.S. and the U.K. since 2007.
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Dealflow overflow. Short takes on a few of the deals crossing our screens.

  • Perch raises $2.5 million to help consumers build credit through payments. The Los Angeles-based company’s app helps users build a higher credit score by logging recurring payments like Netflix subscriptions or rent. The seed round was backed by Marcy Ventures Partners, Citi, Softbank Opportunity Fund, Concrete Rose and Village Capital. 
  • Enterprise Housing Credit Investments invests $58 million in Seattle affordable development. The affiliate of Enterprise Community Partners invested in the development of Seattle’s first affordable high-rise apartment building, which will serve homeless seniors who earn up to 30% of the area’s median income and working families earning up to 60% of the median income. 
  • The NHP Foundation secures $10 million bridge loan to preserve Maryland affordable housing community. The nonprofit will use the financing to purchase 63 townhouse units in nine buildings in Frederick, Maryland. The Low-Income Investment Fund provided the loan. 

Signals: Ahead of the Curve

Bill Gates says the world (sort of) came together to fight COVID-19. Next up: Climate. “This is like a world war, except in this case, we’re all on the same side,” Gates wrote last spring, as the enormity of the COVID challenge became clear. In a follow up post, the billionaire philanthropist says his “optimistic view that the world would come together to fight COVID-19 has largely turned out to be right (with some notable exceptions),” citing accelerated vaccine development and plans for equitable vaccine distribution. Gates says 2020’s public, private and philanthropic collaboration paves the way for progress in 2021, “and not only the promise of getting the pandemic under control.” Gates writes, “The world also has a chance to take concrete steps on one of the other great challenges of our time: climate change.”

  • Rapid vaccine development. “Humans have never made more progress on any disease in a year than the world did on COVID-19 this year,” writes Gates. Multiple companies were able to pursue and develop vaccines because of financial risk sharing by national governments and the Coalition for Epidemic Preparedness Innovation, backed by government and philanthropic partners, including the Gates Foundation (see, “Gates Foundation’s role in Pfizer’s promising COVID vaccine is part of a strategy, not a conspiracy).
  • Manufacturing at scale. The world needs to double or even triples its vaccine dose manufacturing capacity to produce all the COVID-19 vaccines needed. Serum Institute of India, the biggest vaccine manufacturer in the world, is producing doses of AstraZeneca’s vaccine to ensure doses are available in low and middle-income countries. A “second-source agreement,” backed by the Gates Foundation, covers some of the financial risk in the case the vaccine is not approved.
  • Equitable distribution. CEOs of 16 pharmaceutical companies have committed to equitable allocation of COVID vaccines and other lifesaving tools. COVAX, co-led by GAVI (and also backed by Gates Foundation), raised $2 billion in 2020 to secure nearly two billion doses of promising vaccine candidates for vulnerable groups in more than 190 countries. COVAX aims to raise another $6.8 billion next year.
  • Success through failure. The Therapeutics Accelerator backed by Gates Foundation, Wellcome and Mastercard sought to rapidly learn if biotech or pharma companies already had pandemic solutions on hand. “The answer was no,” Gates says. But the process “spared the medical field millions of dollars and a year or two of laboriously going from one company to another, testing one compound after another.”
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Agents of Impact: Follow the Talent

Omidyar Network is looking for a principal for its Reimagining Capitalism work, in Washington D.C…. The Moringa Partnership/Fund seeks an impact manager in Paris… SustainCERT is hiring a head of research and innovations in Luxembourg… Capital Impact Partners has openings for a program intern in Detroit and a finance intern in Arlington, Va. 

Thank you for reading.

– Dec. 23, 2020