ImpactAlpha Latin America | September 25, 2024

ImpactAlpha Latin America: Climate innovation powered by female founders

Dennis Price
Sargassum algae cleanup in the Dominican Republic | Photo credit: Aleksandr Rybalko
ImpactAlpha Editor

Dennis Price

Saludos, Agents of Impact! Welcome to September’s edition of ImpactAlpha Latin America. It was great to meet so many ‘impact minds’ at Latimpacto’s annual conference in Oaxaca. Skip to “Dealflow” below to check out my dispatch from the conference of impact funds actively raising capital.

As always, I want to extend special thanks to our ImpactAlpha Latin America partners – FLII, New Ventures, Alterna, Latimpacto, Aliança pelo Impacto, Pro Mujer, Impaqto and GSG NAB Chile. They help keep us, and you, connected to the people and places driving impact in Latin America.

¡Empecemos! – Dennis Price

In this month’s newsletter:

  • Women-led climate solutions
  • Impact fundraising at Latimpacto
  • Expanding recycling in Brazil
  • Social bond in Mexico

Female founders power climate entrepreneurship in Latin America. Biodegradable plastics made from invasive sargassum. Seaweed-based biofibers to decarbonize global fashion. Water-insulated panels and nature-based construction materials. Women-led companies from Mexico to Chile and Brazil are leveraging Latin America’s natural resources – and scientific know-how – to decarbonize supply chains for textiles, plastics, construction and other industries. “We intend to revolutionize the plastics industry,” said Andrea Bonilla, the Mérida, Mexico-based founder of BioPlaster Research, which converts sargassum seaweed into biodegradable packaging. The invasive algae along the Caribbean coasts “is also an amazing biomass,” Bonilla, an Oxford PhD, told ImpactAlpha. “We can actually do so much with it. And that’s what we are doing.” The innovation landed Bonilla this year’s Lotus Award for Latina climate entrepreneurs from Mexico City-based climate venture firm Savia Ventures.

  • Stocking the pipeline. The region’s growing number of women-led climate startups remain vastly underfunded. Women-led companies receive just one-fifth of venture capital dollars deployed across Latin America. That’s slowing the development of needed climate solutions and leaving investors with a pipeline of male-dominated climate startups. “Latin America is an underserved market. There’s an overabundance of talent. And that extends even further to female entrepreneurs,” Savia’s Andres Baehr told ImpactAlpha. Of the upstart VC’s five investments so far, none have been in women-led companies. The 10 finalists from among 65 applicants for the Lotus Award yielded at least five prospects. “We need portfolio diversity to get the best results,” he said. “If you want the best climate innovation, you need diversity.”
  • Resilience edge. The prize runners-up include Thamires Pontes of São Paulo-based Phycolabs, Loretxu Garcia of Santiago-based Nido Contech, Isabel Pulido of Nanofreeze in Bogotá, and Maria Isabel Gaviria of Medellín-based Fungi Life. All are leaning into some mix of biotech, science and manufacturing. Latina climate entrepreneurs face an added layer of complexity in working with VCs that may not understand climate tech’s capital-intensive nature. Being an outsider can be an edge, says Garcia of Nido, a producer of nature-based construction materials. She entered the male-dominated construction industry at a young age. “I think I overcame the barriers, precisely thanks to coming from the outside and having perspective on the problem.”
  • Climate + gender investing. The growing number of Latina climate founders is matched by a growing pool of Latina climate investors and fund managers in search of women-centered climate solutions. For 25 years, women-led fund manager EcoEnterprises Fund, inBógota and Washington, DC, has demonstrated that economic opportunity, livelihood security and care for the natural world are not only compatible, they’re good investments. It’s upping the ante with its $150 million fourth fund. Pro Mujer has increased its financial and technical support for women smallholder farmers practicing regenerative farming. Sao Paulo-based Positive Ventures, led by Andrea Kestenbaum, invests in “planet positive” solutions supporting the low-carbon transition. Mexico City-based Regenera Ventures, led by Stevie Smyth and Laura Ortiz, is providing equity to regenerate land and strengthen the communities that depend on it. 
  • Keep reading, “Female founders power climate entrepreneurship in Latin America,” by Dennis Price on ImpactAlpha. Jessica Pothering contributed reporting.

Dealflow: Capital Raising

Overheard at Latimpacto’s ‘Impact Minds.’ “We’re here to bet on impact for Latin America,” Lorena Guille of the Monterrey-based Fundación FEMSA said at Impact Minds in Oaxaca, Mexico earlier this month. Current business and investment models have allowed inequality and violence to take root in the region, said Guille. “It’s possible to build a different legacy. Today we’re writing a new chapter.” On the sidelines, ImpactAlpha’s Dennis Price nosed out catalytic deals, active fundraising, mergers and milestones that lent substance to such claims. 

  • Catalytic capital. IDB Invest, the private sector arm of the Inter-American Development Bank, has mobilized private capital for a $50 million sustainability bond in Guatemala, a $50 million blue bond in Costa Rica, and an $80 million social/gender bond in El Salvador. The bank aims to be “a conduit between opportunities that generate scalable impact within our region and international and global investors,” IDB Invest’s Jan Petter Eskildsen told ImpactAlpha. Separately, leveraging a first-loss tranche and subsidized debt, Madrid-based Gawa Capital is more than halfway to its targeted €300 million ($332 million) Kuali Fund, a climate adaptation fund focused on solutions for farmers and small businesses in Latin America and the Caribbean.
  • Actively raising impact funds. Fundraising is ahead of schedule for AlphaMundi’s Alpha Latin America 2030, or ALA 30 fund, according to the Geneva-based fund manager, which claims investor expressions of interest amounting to $25 million for the firm’s first equity fund in Latin America. Deetken Impact is raising a fresh $40 million for its Ilu Women’s Empowerment Fund, an evergreen gender-lens debt fund focused on Latin America and the Caribbean. Bogotá-based Corporación Inversor is actively raising its second fund. Quito-based IMPAQTO Capital is nearing a final close of its first, $2 million, revenue-based finance fund.
  • Startup search. Two funds backed by IDB Lab launched this week with calls for proposals for funding. The Green Catalytic Fund invests in bioeconomy startups, and Region Plateada is backing companies providing elderly care. Impacta Fondo, animpact fund hosted at Bogotá-based Universidad EAN, has raised $1 million of its $10 million target, and made its first six investments. Haiti Startup Talent is actively raising to provide follow-on capital to the best of more than 100 Haitian startups and small businesses it has seeded with capital and technical assistance to boost their impact and alignment with the Sustainable Development Goals.
  • Teaming up. Mexico-city based Kaya Impacto, a financial advisor to impact funds and enterprises, has merged with Amplo, a Bogotá-based impact investment management company. The combined entity, AmploKaya, will provide advisory as well as asset management services for impact investors in the region.
  • Find more news, chatter and details from Oaxaca, and catch up on Dennis’s earlier coverage, “Meeting of ‘impact minds’ aims to catalyze capital for Latin America.”

Circulate Capital backs Cirklo to expand plastic recycling in Brazil. Singapore-based circular economy investor Circulate Capital inked its second deal in Latin America by investing in Brazil’s Cirklo. Cirklo was formed by the merger of Green PCR and Global PET, two Brazilian recycling companies owned by Sao Paulo-based private equity firm eB Capital. “Our focus is to seize growth opportunities in the recycled plastics market in Brazil and pave the way for sustainable development and innovation in the sector,” said eB’s Luciana Antonini Ribeiro. The company has plants in Sao Paulo and Paraiba, in northeastern Brazil, that recycle a combined four billion plastic bottles per year. Circulate’s investment will enable Cirklo to expand its footprint in Brazil’s Northeast and Southeast.

  • LatAm pipeline. Two dozen LatAm countries that have plastic waste recycling laws in place. Circulate says four of those countries, including Chile, Colombia, and Mexico as well as Brazil, are well-positioned to rapidly move towards a circular plastics economy. The circular-economy investor has mapped out a pipeline of 100 companies that require at least $240 million in growth funding (see, “Circulate Capital brings growth capital to plastics recycling in Latin America”). Circulate’s investment in Cirklo comes from its new Latin America and Caribbean strategy, backed by IDB Lab, Lukas Walton’s Builders Vision, Mondelez International, Unilever and other corporate backers. Its first investment in the region was in Colombia-based recycling company Polyrec.
  • Check it out.

More deal activity:

  • Circular economy. IDB Lab extended a $3.2 million loan to help Colombian recycling company GAIA Vitare expand its facilities and upgrade its machinery.
  • Conservation finance. The national development bank of Brazil, Bndes, opened a one billion real ($180 million) low-cost credit program for sustainable agroforestry and reforestation projects in the Amazon basin.
  • Impact on livelihoods. Atta Impact Capital made the first investment from its Mesoamerican Catalytic Fund, backing Vitrinnea, El Salvador’s online marketplace for second-hand goods… Santiago, Chile-based startup accelerator Imaginemade the first three investments for its first fund, which is investing in Latin American startups focused on the future of work and future of finance.
  • Inclusive communities. Platform for Social Impact in Puerto Rico secured an additional $57 million, including $30 million from the US Economic Development Agency, to build a center to house its OASIS Project… A social investment bond issued by Catholic Relief Services and the Mexican state government of Nuevo Leon will support access to formal jobs for young adults… Impacta VC selected 13 startups to support their expansion to the US market. Among them: edtech firm Golaço Training, climate tech company eGreen and telemedicine startup Salud Contigo, all in Chile.
  • Financial inclusion. Mexico-based AltScore clinched $8.5 million to provide credit underwriting and loan management software for financial institutions and large companies that offer small business financing… The IFC supported mortgage lending for women in Chile… Drip Capital raised $113 million in a mix of debt and equity to provide working capital to small businesses in Mexico, the US and India… Colombia and Mexico-based Finkargo inked $95 million in debt and equity from Quona Capital, Community Investment Management and other investors to provide credit to small businesses in Latin America buying stock from overseas.
  • Investing in health. Lightsmith and the Chan Zuckerberg Initiative invested $16.6 million in Beep for in-home health in Brazil… Koltin, a Mexican insurance tech focused on providing affordable private health insurance to seniors, raised $7.3 million.
  • Just transition. Colombia’s Banco Finandina raised $39.3 million from IDB Invest and other investors for its first sustainable bond issuance, which will invest in micro electric mobility and EV adoption. 

Get in the Game

🏃🏽‍♀️ On the Move

Elizabeth Boggs Davidsen, currently vice president of the US International Development Finance Corp.’s office of development policy, will become GSG Impact’s new CEO on Monday, Oct. 7… Viviana Alva Hart, who previously served as Inter-American Development Bank representative in Barbados, will be IADB’s representative in Argentina.

💼 Step Up

Blue Like an Orange is looking for an investment analyst in Mexico City or Monterrey… Community Investment Management seeks an investment analyst in Bogota… Also in Bogota, U.S. International Development Finance Corp. is recruiting a project finance specialist.

iGravity is looking for a senior transaction associate in Colombia… Swiss investment advisory Clarmondial AG is recruiting an investment partner in Latin America and the Caribbean to scale up work on nature-related investments in the region.

🤝 Meet Up

Don’t miss these upcoming impact investing events: