2030 Finance | February 23, 2018

Inclusive venture capital, high-growth Ethiopian businesses, India’s electric vehicle market

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#Featured: New Revivalists

Brian Dixon: The 34-year-old African-American VC turning inclusion into a competitive advantage. Call it the new face of venture capital. Kapor Capital is quietly building one of the youngest, most talented and most diverse teams of venture capitalists in the industry. That team includes Brian Dixon, who at 34, is one of the youngest African-American male VC partners in the country.

Kapor Capital, in downtown Oakland, is one arm of a family of organizations built by software entrepreneur Mitch Kapor and his wife, Freada Kapor Klein, to boost inclusion in the tech industry. With a portfolio of more than 100 ventures — more than half with a person of color or a woman on the founding team — the decade-old impact investment firm is turning Silicon Valley’s diversity problem into a generational opportunity.

“What tends to get lost [about having a diverse team] is, it’s also great for business,” Dixon told Amy Cortese. “We’re going to see a company with a diverse set of founders solving a problem that hasn’t been solved before because of their particular lens. That is the opportunity that, as investors, you’re always looking for.”

Read, “Brian Dixon: The 34-year-old African American VC turning inclusion into a competitive advantage” by Amy Cortese on ImpactAlpha.

Brian Dixon: The 34-year-old African-American VC turning inclusion into a competitive advantage

New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

#Dealflow: Follow the Money

Cephus raises $51 million for high-growth Ethiopian businesses. The new private-equity fund will back small and growing Ethiopian businesses with a focus on manufacturing, agro-processing and services. Growth-stage companies have the potential to create millions of jobs in Ethiopia, Africa’s second-largest country by population, according to the World Bank. The Cephus fund is not impact-focused, but it aims to address the funding gap for Ethiopia’s “missing middle” — growth-stage companies that have a harder time raising money than early- and late-stage peers. Cephus aims to raise $100 million for the fund. Its first close was backed by CDC Group, Norfund, and the European Investment Bank.

Aye Finance raises $3.8 million to ramp up lending to underbanked businesses in India. The company, based in Gurugram, India, uses alternative metrics, including non-financial ones, to assess creditworthiness for businesses that are overlooked or rejected by mainstream lenders. Aye Finance operates 72 lending branches in 10 Indian states and has issued $77.4 million in loans to 40,000 businesses, Inc24 reports, and hopes to reach $93 million by year-end. The latest round was raised from Hinduja Leyland Finance, IntelleGrow and an unidentified investor by securitizing part of its loan portfolio. Last year Aye raised $8 million from Blue Orchard and an additional $1.5 million in its first securitization deal.

Impact investor group launches vegetarian-meat company for Chinesemarket. A quarter of the world’s meat is consumed in China, including half of all pork, and meat consumption and production are both rising. Dao Foods International — a new collaboration between Dao Ventures, Moonspire Social Ventures and New Crop Capital — aims to “accelerate [China’s] shift toward plant-based and clean meat and capitalize on the investor interest in these better alternatives,” the company said in a statement. The partners did not announce specific plans. New Crop Capital has invested in 16 sustainable-food ventures, while Dao Ventures has invested $200 million in impact capital in more than 1,000 startups.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Signals: Ahead of the Curve

Will markets trump policy on electric vehicles in India? Nitin Gadkari, the Indian Minister for Road and Transport, recently called the government’s plan for 100% electric vehicles by 2030 “too ambitious,” suggesting 30% was more likely. Gadkari also said no new incentives will be provided to the industry beyond what’s already in place. Even without incentives, the growth of India’s EV market is continuing. Mahindra Group, a multinational conglomerate, this week announced a $139 million investment in electric vehicles over the next four years, reports Inc42 (compared to $92.9 million over the previous six years). A recent ASSOCHAM-EY study projects double-digit growth in India’s EV market through 2020, thanks to tighter emission standards, falling battery prices and growing consumer awareness. Automakers Renault, Maruti Suzuki and Tata Motors, along with Mahindra, are all staking claims in India’s EV market. “We are not waiting for any policy to move forward,” Pawan Goenka, a managing director at Mahindra Group, said this week. “To be a pioneer, you have to create the road, and we have to move forward.”

Thank you for reading. Onward! Please send news and comments to [email protected]