Blockchain/AI/IoT | December 20, 2017

Impact Tech: Year in Review. Big challenges, falling costs, solutions at scale

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Greetings, ImpactAlpha readers!

Year in Review: Impact Tech

Tech’s new new thing: positive impact. Let others track the bitcoin bubble. ImpactAlpha is mining for blockchain solutions for migrants and refugees. While they obsess over Big Tech’s election #fail, we’re tracking investments in civic tech that boost engagement and participation.

At ImpactAlpha, we’re telling the next tech story. While others are stuck on Trump’s wall, we’re finding venture capitalists backing tech startups that make immigration easier. The fintech story of the year wasn’t the U.S. stock market boom. It was the new approaches to credit-scoring, microinsurance, mobile money, pay-as-you-go and small-business finance that are bringing hundreds of millions into the formal economy for the first time.

As new capabilities enable new solutions, entrepreneurs and investors around the world are finding that big challenges mean big opportunities. In May, we wrote that no tech investment pitch is complete without a nod to AI and machine learning, with extra points for blockchain. Next up, we predicted: tech startups touting their alignment with the 2030 global goals. Bring it on.

#ImpactTech on ImpactAlpha

1. Energy is now a tech story. Renewable energy is showing the same kind of network effects, increasing returns to scale and virtuous circles that powered the tech revolution. In ImpactAlpha’s most popular post of the year, David Bank shows why renewables are no longer ‘alternative.’ Like mainframes, fossil fuels are a ‘legacy’ technology. Read why 2017 may have been the inflection point in the global energy rebuild.

Renewables are no longer ‘alternative.’ Fossil fuels are ‘legacy.’

2. New funding mechanisms bridge the cleantech venture-capital gap. VC funding has proved a poor fit for the high risks and long holding periods associated with cleantech investing. The Climate Solutions Collaborative profiled the new crop of innovative investors stepping up to fill the gap. Congruent Ventures’ early-stage cleantech fund, for example, has a co-investment mechanism so limited partners can participate in follow-on financing for successful companies. See more cleantech financial engineering.

New funding mechanisms for Cleantech 2.0 bridge venture capital gap

3. Five cleantech sectors for $1 billion from Bill Gates (and other Breakthrough investors). Breakthrough Energy Ventures, the billion dollar cleantech fund backed by Bill Gates, Jeff Bezos, Vinod Khosla, Jack Ma and other big name investors, has identified five promising and underfunded priority areas for investment. A biggie: grid-scale storage to make scaled-up renewable power work. Find out the other four areas.

Five cleantech sectors that Bill Gates (and other Breakthrough investors) have their eye on

4. Blockchain solutions to the 2030 global goals. ConsenSys, the ambitious Brooklyn software company founded by blockchain guru Joseph Lubin, has launched a $50 million in-house venture-capital fund. The ConsenSys Ventures fund will back startups aiming the distributed-ledger technology toward global challenges like refugee assistance, distributed energy, and supply-chain tracing. “Blockchain is an architecture,” says Kavita Gupta, the former World Banker who was tapped to head the fund. “It can enable solutions to almost any SDG.” More blockchain solutions to global challenges.

ConsenSys puts up $50 million to hunt for blockchain solutions to global challenges

5. Eleven venture capitalists investing in immigration tech. More than half the founders of $1 billion U.S. startups were born abroad. Unshackled Ventures, backed by Laurene Powell Jobs’ Emerson Collective, is looking to invest $25 million in foreign-born entrepreneurs by hiring them as students, taking over their visa process and backing their startup ideas with $300,000. And at least 10 more venture firms are investing to make immigration easier.

11 venture capitalists investing in immigration tech

6. Inclusive fintech firms are bringing world’s next billions into the formal economy. High-value, low-cost financial services — bill pay, cash transfers, credit accounts, remittances, insurance — can crack the code on the low-margin, high-volume business models required for emerging consumers around the world. Catalyst Fund, backed by JPMorgan Chase & Co. and the Bill & Melinda Gates Foundation, is supporting fintech startups in emerging markets that are aiming to reach the poor. Can ‘asset-light’ fintech crack the code for base-of-the-pyramid business?

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

7. Urban-tech startups are tapping artificial intelligence. Countering the dominant doomsday narrative, smart-city startups are turning to AI to make cities safer and more efficient. Companies in the latest cohort of Urban-X, the urban-tech startup accelerator from venture fund Urban Us and BMW-Mini, announced in September, are tackling challenges in transportation, planning, service delivery, energy efficiency and construction. “The real scorecard is can we create impact while creating returns,” Stony Baptiste, a partner at Urban Us, told ImpactAlpha. View all nine companies.

Urban-X aims to accelerate startups using AI to reengineer cities

8. Food tech draws big tickets. Tastes great, less carbon. Alternative protein plays, whether of the plant-based or test-tube variety, raised big bucks this year. Alternative-meat companies Impossible Foods and Memphis Meats, which say they use less land and less water than livestock, attracted Bill Gates as an investor. Beyond Meat raised $55 million last week from Cleveland Avenue, the Tyson Foods-backed venture firm of a former McDonald’s CEO. Funding for innovative food increased 60% to $206 million in the first half of the year. Get your food tech on.

Climate, consumers, constraints drive growth in food-tech investing

9. Tech enables inclusive agriculture. The wave of agricultural technology startups connecting smallholder farmers with markets includes Agruppa in Colombia, GreenFingers Mobile in South Africa, and AgroStart and Waycool in India. The total amount of funding still remains far short of the estimated $200 billion needed for smallholder farming, and a much larger amount required by rural enterprises. How tech is helping smallholder farmers boost their incomes.

Smallholder farmers are investable

10. Tech can fight inequality. “I think overall the greatest opportunity that we have to change generational wealth and generational inequality is through the startup scene,” Harold Hughes, the founder of online sports-ticket site Bandwagon, said at a Black Angel Tech Fund event in Atlanta earlier this year. A report from Black Tech Mecca in Chicago found that median black salaries in the tech sector, at $64,000, were close to the overall median of $70,000. Read how tech can reduce disparities.

Can startups help equalize racial wealth disparities?

11. Civic engagement gets a tech makeover. From new positions at City Hall (think: Chief Data Officer) and public-service fellowships to innovation units in the mayor’s office, civic engagement is getting a tech makeover. New experiments and old partners are coming together to reimagine civic engagement, including in smaller cities and rural communities, where public officials are embracing a pragmatic and local approach to problem solving. Find your civic-tech pride.

Civic tech goes local to boost community problem-solving

More civic-tech deals and initiatives

Onward! Please send news and comments to [email protected].