The Brief | April 30, 2019

Impact tranches, alt-protein ingredients, coding in Indian languages, investing in migrants in Mexico

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Taking an ‘impact tranche,’ Packard Foundation pushes forest fund beyond business as usual. Different investors in the same deal have long taken different tranches of debt with specific risks, rewards and duration. Now investors can take specific “impact tranches” as well. A new Southeast Asia forestry fund launched by Australia-based New Forests includes a tranche aimed at impact investors that includes specific reforestation, biodiversity and community livelihood goals. The David and Lucile Packard Foundation helped negotiate the impact tranche and has approved a $10 million equity investment in the planned $300 million fund.

The aim is to encourage larger-scale commercial fund managers to commit to deeper climate and conservation outcomes than they would otherwise by providing a sweetener in the form of lower-cost capital. In the forestry fund, the Packard Foundation agreed to receive a reduced equity return if New Forests delivers the specified outcomes. That reduces the perceived risk of commercial investors, who might balk at such “non-commercial” activities. “We’re still getting our capital back, we’re still getting a return, but it’s reduced versus the commercial investors,” the Packard Foundation’s Susan Phinney Silver told ImpactAlpha. “The idea is to use that delta to drive the impact activities and prove out to commercial investors that this isn’t as scary as you think it is.”

Keep reading, “Taking an ‘impact tranche,’ Packard Foundation pushes forest fund beyond business as usual,” by David Bank on ImpactAlpha.

Dealflow: Follow the Money

Clara Foods raises a round for alt-protein ingredients. The San Francisco company’s flagship product is a foamy egg-white alternative used for baking made with genetically modified yeast that produces proteins without animal inputs. “When we looked at the egg white, we saw a multibillion-dollar ingredient that was 90% water and 10% protein so it was a great place to build a protein-focused platform,” Clara’s Arturo Elizondo told AgFunderNews. The company’s Series B financing was led by Ingredion, a food industry ingredients supplier, and included B37 Ventures, Hemisphere Ventures, and accelerator VC SOSV. In February, another alt-protein ingredient company, Motif, raised $90 million from Breakthrough Energy Ventures to engineer dozens of proteins derived from dairy, egg and meat. Check it out.

India commuter-bus network Shuttl raises $5 million. The Gurgaon-based firm manages a network that runs 30,000 commuter shuttles a day in seven India cities. Shuttl raised $5 million (about Rs 35 crore) from U.S. venture capital firm New Atlantic Ventures, reports TechCircle, after raising $7.2 million last month from Sequoia Capital India, Lightspeed India Partners, Times Internet and other investors. Amazon’s $100 million voice-tech Alexa Fund is also an investor. Shuttl pledged to add 300 electric buses to its fleet by next year as part of the Climate Group’s EV100 campaign. Electric vehicles “are the future of mobility and Shuttl is keen to play a key role in the adoption of electric buses in India,” said Shuttl’s Amit Singh. Another Indian bus provider, ZipGo, raised $29 million last year to transition its fleet to all-electric busses. Dig in.

Gray Matters Capital seeds platform to teach Indians to code in native languages. Chennai-based GUVI delivers instructional videos in regional languages, as well as mentorship and job leads to aspiring Indian engineers. Founded by former PayPal executives, the platform has more than 140,000 users. GUVI says its 900 videos give students an edge and “potentially paves the way for more technology startups to emerge” from India’s smaller cities. U.S.-based impact investor Gray Matters Capital seeded the firm with Rs. 1 crore ($143,000) from its edLABS India education initiative. GUVI aims to train a million coders in India by 2020. More.

Signals: Ahead of the Curve

Investors mobilize to expand opportunities for migrants in Mexico. The Refugee Investment Network and Mexico’s Secretariat of Foreign Affairs launched the Initiative for Inclusive Investment in Mexico, or 3IM, to support investments and businesses that reduce displacement and create jobs for migrants. Key will be to support “new venture creation and the expansion of employment, workforce development, and skills matching to create thousands of jobs and enrich the entrepreneurial ecosystem in Mexico,” the Refugee Investment Network said in a statement. No financial commitments were made. First up: a market assessment to identify refugee investment opportunities in southern and northern Mexico.

  • Immigrant edge. The initiative was created in “recognition that forcibly displaced people are hard-working, entrepreneurial, employable, and creditworthy,” said the Refugee Investment Network. In the U.S., for example, immigrants are now nearly twice as likely to start businesses as native-born Americans. Immigrant-owned business employ 8 million Americans.
  • Refugee-lens investing. The growing number of refugee-focused products includes bonds, loan facilities and funds targeting refugee solutions. Last year, “Paradigm Shift,” a Refugee Investment Network report, rounded up more than 100 philanthropic funders, impact investors, institutional investors, networks, angels, market-return investors, and government partners making “active” investments in or in support of refugees.
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Agents of Impact: Follow the Talent

Capria is hiring a manager of business operations in Seattle… Social Finance UK is looking for a manager for its advisory and digital labs teams in London… Roots of Impact hosts a roundtable on impact-linked finance May 6 (see, “Impact-linked financial rewards help high-impact companies attract growth capital)… Impact Investing Stammtisch Berlin convenes “Blockchain in impact investing,” in Berlin May 7… Resilience Capital Ventures’ Gillian Marcelle, Ford Foundation’s Christine Looney, Angela Matheny of Colonial Consulting, Nathalie Molina Niño of Brava Investments and Impact Shares’ Ethan Powell are “Tackling racial bias and marginalization through impact investing,” in an Impact Entrepreneur webinar May 9.

April 30, 2019.